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Layar is one mobile application that has definitely managed to get quite some tongues rolling and keyboards rattling this past week, including at the Mobile 2.0 Europe conference in Spain where I just got back from (video demo below).

Layar is a so-called ‘augmented reality browser’, an application that turns you mobile phone’s camera viewer – only on Android-powered phones for the time being – into a full-fledged information portal and local business search engine. It essentially puts an information overlay on top of your camera view, bringing digital data of various sorts into play whenever you’re looking at or for something in the real world.

Imagine being on the look-out for a great new place in a street nearby your current apartment or house and seeing all the real estate listings, with some details and pricing included right from your mobile device as you’re walking down the street. Imagine watching status updates your friends pushed to social networks roll in with location information attached to them (e.g. ‘Tweets Nearby’). Imagine finding information on ATMs, public transport etc. in a city you’re visiting just by starting up the camera on your mobile phone. And thanks to an integration with Google Local Search, how about being able to look up contact information and reviews for businesses (e.g. restaurants, bars, etc.) in your direct neighborhood with one-click dialing capability?

These are all things that are or will be possible with Layar, and there are so many use cases I could think of in under a minute that you’d really have to make an effort to miss the enormous potential of this application.

Layar is typically one of those cutting-edge things that aggressively shoves you nose-first into the enormous potential of the next-generation smartphones and platforms, giving you an idea of what you can expect from inventive developers and service providers thankfully making use of their ever-increasing capabilities in the near future. I can only hope for Layar that they’re not entering the game too early.

Check out this Engadget video for more hands-on coverage. And in case you were wondering, you can expect a Layar application for the iPhone 3G S this Autumn (and not Springtime, duh).

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