Nearest Tube is an iPhone 3GS app developed by AcrossAir that uses Augmented Reality to display the nearest metro station while using the iPhone camera:
It’s only working in London for now.
I think the idea is similar to that of the Android’s Layar, which I posted sometime ago in this blog.
Mixes GPS, map, camera and compass functions to map the graphics in the right stop.
Source and more info: Gizmodo