Augmented carnage

The University of Electro-Communications in Tokyo has developed Augmented Coliseum, an amazing (just have a look at the video) augmented reality game environment that enables virtual functions for playing a game using small robots and vehicles, superimposing computer graphics onto toys in the real world.

The remote-controlled vehicles scurry around, while status circles and other data are projected on the surface. As the vehicle moves, cameras and photo-detectors relay the movement to tracking software.
Images are projected to the areas corresponding to the actual positions and directions of the toys: virtual laser beams and missiles appear to fly out of the real vehicles; explosions are overlayed on the screen as they connect with their targets.

Shown this year at Siggraph.
See also Tom's Hardware report.