There is a very cool use for the camera in mobile phones: augmented reality.

I have seen the first games show up one or two years ago where you could shoot down insects flying around the room and similar ones. Augmented reality on mobile phones is getting more and more advanced. Siemens announced (German) Kick Real, which lets you kick a virtual soccer ball with your foot. You have to kick the ball into a virtual goal. The software calculates based on the movement of your foot the direction and intensity of the kick.

Mobility Site reports about the research of an Austrian student in the field of Augmented reality for mobile phones. A video shows a virtual character simulated onto reality visible through an i-mate SP5 Windows Mobile Phone. I am following Virtual Reality since over a decade. It would not surprise me if mobile phones will finally be the mainstream device that has not shown up yet. Users could utilize augmented reality everyday and everywhere for games and also for repair work or other tasks.