At SXSW this year, everyone was talking about this helicopter that Parrot Digital had created. It was a physical toy helicopter that had a camera mounted in the cockpit. The camera relayed the visual back to your iphone, which was your controller for this helicopter. Through the screen you saw what the whirlybird saw, and you flew it by tilting the phone and sliding controls on the screen. Next level shit. When I saw the video below, I instantly thought of it as a homemade version of the helicopter. Pretty awesoe.
This convergence of physical and digital experience seems to be the holy grail right now, from augmented reality to this project-
Apparently this has been all over boingboing. Whatever.