Earlier this week my son and I checked out the iPhone's augmented reality Seek N Spell game.
The game uses the iPhone 3G and 3Gs' built-in GPS to locate the gamer and then scatter virtual letters around their real world location. You then have a set amount of time to locate the letters and use them to spell words for a score.
As I mention in the video, it's a neat concept that needs some work.
The biggest issue is that the game doesn't allow you to manage or change the play space, instead dropping letters in a football-field space around you. It would be much better, and more playable, if you could shape your playspace on the map before starting.
I also wasn't a big fan of the scoring system, which didn't take into account the letters used, instead just scoring based on the length of the word.
In it's current state, Seek N Spell is a curiosity, an interesting tech demo, but with some work it could be a substantial and fun outdoor game.