Augmented reality looks at augmenting the real-world with virtual reality in real time. It's a been around for a long time (the term first coined in 1990), and has become popularised in the public mind by the film Minority Report (2002). More recently, some interesting projects have been looking at mobile phone applications as avenues for new interest and research.
This video here illustrates an idea how augmenented reality could positvely work in an educational context. For me, it identifies the importance of reading - central to student learning - and paper as a tool to support it. The main character uses the individual reflective "alone" time to prompt ideas, that are then explored and expanded through digital interactions as he moves through the world. A simple spark of an idea unleases a curiosity that the student can then explore in an augmented way, on paper and his experience in world. The creator is Sorin Voicu, from the Valle Giulia faculty of Architecture, University of Rome, in Italy.
Check out also MIT's Adaptable Bus stop as part of their SENSEable City Laboratory,to see some other potentially transformative ideas in this space.