Augmented Reality
Work around augmented reality has been around for quite some time I believe, but I really believe that the success of the iPhone has led to increased attention and feasibility of augmented reality. Google's Android has also helped open the doors. I am not going to go into arguing whether the Apple's iPhone or Google's Android is better, but the reality is that Apple's iPhone has been a game changer in the mobile phone realm. Putting that discussion aside, I believe augmented reality is really the next step. Augmented reality is creating something we can call "Reality 1.5" because it is not yet something we can interact with using the majority of our senses, and requires an intermediary device to interact with it. A separation is clearly present between the two, but once that separation disappears we will be in "Reality 2.0".
This YouTube video of Nokia Future Technologies representing it's demonstrations of mixed reality is what I believe the next small step is in the near future. The current use of augmented reality is through mobile devices like the iPhone or the G1, but work is being done to integrate the use of augmented reality in a more "accessible" way. The word "accessible" may not be the best word, but these mobile devices are limited in areas such as screen space (affecting the viewable area), and the fact that you have to hold up the device and point it where you want to look. The pointing is a mild limitation really, but it is a large enough limitation to become a hassle. Integrating those capabilities into glasses is much more convenient. The question of how we interact with the objects being presented through augmented reality comes into question, but I believe that can be solved through the research that is being done to utilize brain power. For example, a university in Japan has created a device that reads the brain waves of a person in a wheelchair to move the wheelchair. Several years ago it used to take several seconds before the device actually responded, but currently the device responds in under a second. There are also a few companies that are creating a similar device to be used with video games. This technology can be used to answer the question of how a person interacts with an object in augmented reality with the use of a physical device like a touch screen.
The next major step, is when these devices that are "worn" are no longer needed because it is all integrated into the human body. Although it is still in development and has not been actually implanted in a person yet, MIT researchers are showing progress with an optical implant that helps restore sight (limited to only those who had sight to begin with). With the progress being made in this realm and prosthetic limbs, we may soon be in a world that science fiction portrayed. I also believe this is the actual answer behind holograms. Science fiction has often portrayed a world filled with floating images that we can interact with, but the reality of the matter is that according to our understanding of the current universe and science, light must reflect off of something or be generated in order for something to be displayed. The closest we have gotten to creating a holographic image is through displaying something on mist, thin glass, or even 'bending' the image in a way to give the illusion of a 3D object. The 3D IMAX experience requires the use of special goggles to create that effect. Until some breakthrough discovery occurs, augmented reality may very well be the answer to holograms. If we are all wired for "Reality 1.5" or "Reality 2.0", then what is to say that an image can be displayed floating in the air that we can interact with using all or some of our senses? That effectively becomes a "hologram". The implications of such a future is exciting, yet scary at the same time, but nevertheless I am interested in following its progression.