A fascinating new product called “Layar” is taking the internet by storm with it’s augmented reality “Browser” capability that runs on the Android G1 phone.

The upcoming Layar Android application enables sets of viewable data to be displayed in the viewfinder of your mobile phone. Pointing the phone’s camera at various locations instantly overlays information about the respective location in the viewfinder. Real estate, banking and restaurant search companies have already embraced the future of mobile web by creating layers of information to be made available using the platform.

It essentially combines data from the phone’s GPS & Magnetometer (compass) to determine your location and orientation, and then overlays relevant information over a display captured via your mobile device’s camera.  It’s pretty impressive, and the company says that an iPhone version is underway (presumably for the iPhone 3GS).  However, currently it only works in the Netherlands.

See the demo video after the break.

via Layar: The first mobile augmented reality browser.