Before I jump into explaining just how neat I think this is, you should probably just watch this video.
Ok, now that you've been properly amused and delighted, let's talk about how cool this is. First, what you are not seeing: This is not a program that looks at a circuit and breaks it down in real-time. It appears to be that, at first glance, but it isn't. What you are seeing is a preconfigured circuit that is tracked and rendered by using the orientation of that piece of paper there. He also happens to have the physical pieces in the correct spots to line up with the circuit. Make sense? The graphics would be there even if he removed all of the components.
So, how is this useful? Well, I suspect this is a fantastic learning tool. When I was in school doing these things, we had lessons on a computer, followed by a quiz on a computer, then later we did some hands-on work in a lab. This augmented reality system brings the two together seamlessly. I can build my circuit with the aid of a computer and integrate my knowledge acquisition with my physical learning. That alone is incredibly powerful and, in my opinion, deserves further efforts.
Another area where this could be immensely useful would be repair. Especially for folks like me who know how to solder, have a multimeter, but don't have the foundation of knowledge to look at a circuit and identify test points and failures right off the bat. Being able to follow graphical explanations, flow diagrams, data sheets, etc, all in real-time on top of the circuit itself would be incredible!
Unfortunately, I don't think this is an application that you can just download. It is a prototype built by a company called Equipcodes to show off some of their tech. Maybe it will become a real product if we beg enough, so commence begging!
Anything that can get the frustration out of prototyping has got to be a good idea. For a field service engineer this has to be a great tool.
For the service engineer working on something like a track signal circuit (railway), being able to confirm that the circuit wires have gone back on the correct locations would have been such a boon and saved a lot of worry.
This is good tech, I would like to see how low the cost would be for Arduino users?
I had a similar reaction till I imagined troubleshooting a circuit that I didn't quite understand. You could click on something and it would say "this is an X and it does this, test this piont for this result"
When I first saw the video I was just so-so, but then it hit me how awesome this tool would be for analyzing old circuit boards to understand the design and functions. I could easily see this type of tool as an integrated way to take a board and reconstruct the circuit schematic and generate a PCB layout to make a replacement.