Developing for the iPhone can be an endless source of frustration. You can spend hours and hours of developing your application only to have it rejected based on some obscure clause in the iPhone SDK agreement.
The iPhone SDK license restricts developers to using only the published API, much akin to buying an excited young child a LEGO Mindstorms robotics kit and telling them to only play with the square blocks. In this war against sanity, applications using Augmented Reality are a casualty. The result is that while many developers have created brilliant applications which make using of augmented reality in innovative ways, these applications will not be accepted in the iPhone store, as they use the unpublished bits of the API.
For those late in the game, augmented reality (AR) is the result of combining real world elements and virtual elements, allowing us to interact with virtual objects in a manner similar to real objects.
While videos have been popping up all over YouTube which showcase AR applications on iPhones, it is not possible to install these applications, except on jail-broken iPhones. Come September though, and you will find AR applications slowly (very very slowly) start appearing in the AppStore. With the release of SDK 3.1, Apple will open up some of the API which allow developers to access the iPhone’s camera.
So, developers got a few more blocks to play with, by the playground still has a lot more plastic bars the developers can only chew on.