Bing Vision, is a pretty cool stuff. The iPhone users have had the privilege of using it now for over eight months, since Dec 16, 2010. Windows Phone Mango users (in some regions) will soon be able to search book, CD and DVDs by just scanning its cover.
In a presentation about computer vision (see video below), Rick Szeliski from Microsoft Research's Interactive Visual Media group talks a lot about the advancements in computer vision technologies MSR has made in the last decade including but not limited to Kinect. One other recent project of note was called "Lincoln", by Larry Zitnick, which formed the basis for Bing Vision.
One interesting tidbit Rick mentions during the presentation is the fact that whilst recognizing people en mass is hard, it's already viable for smaller groups like families. The fact that he "uses the example of logging in a PC in light of the rumors that Windows 8 will support such a feature is at least note-worthy evidence of the feature's practicality."