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We’ve written about augmented reality a few times but have mostly dismissed it as “blue sky.” Though there’s quite a long way for the technology and business models to go, it’s still one of the cooler areas of mobile app development out there.

For those unfamiliar, augmented reality apps use a phone’s camera viewfinder to display the world around you with graphical overlays that represent different data sets. In English — and in local search terms — this can mean holding your phone up to a busy street and seeing floating icons with storefront information or promotions.

Though the availability and reliability of all these data will be a gating factor to the “reality” of augmented reality, the underlying technology is making strides. Out ahead is Layar, an Amsterdam-based company that just released its 3.0 platform for iPhone and Android based devices.

The new version has lots of capability to let third-party developers contribute geotargeted information that people see when they use Layar in a given location. TechCrunch gives some examples, which are more fun than utilitarian. But you can start to imagine some of the possibilities for local search.

Also check out Layar’s promo YouTube video here.

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