Here is another application that combines real world with computers. Wii jogging is an application for Wii that allows you to go for jogging at Tokyo using Google Streetview. You are jogging at the actual roads of Tokyo, in the middle of the roads (you don’t have to be afraid of being hit by a car:)).
If you think about the future, such an application can create a social network of people walking out (virtually) on the streets. That means a virtual world. And even if lively.com failed, it’s not hard to imagine that a virtual world can be built over Google Streetview (and Google Earth in general), with people walking everywhere, driving cars, interacting with each other and even placing advertisements. So the virtual world will be a representation of the real world enhanced with virtual objects like people, add on images, files, etc. This is so powerful because people are familiar with the real world, not virtual ones. Having the exact same environment of the the real world on the computer and the ability to interact with others there, will create new opportunities in several areas including travel, real estate, education and many other industries.