In the 3D modeling sense, AR involves combining a live video stream with a 3D model to create the illusion that the model is a physical object in the real world. All you need is a webcam, a 3D model, a printed-out paper "target" and a piece of AR software that can put everything together.
This video shows AR in action:
And here's an illustration that shows the setup:
Inglobe Technologies released version 2 of their AR-media Plugin for Google SketchUp. Start out by grabbing the Quick Start Guide; you'll find the relevant links about halfway down the plugin's webpage. Follow Steps 2 and 3 to download and install the software; the free Personal Learning Edition will let you see how everything works without spending any money. After that, achieve instant gratification (my favorite kind) by skipping ahead to Step 6 in the Quick Start Guide: "Creating your first Augmented Reality Scene".
Here's a video that shows off the new features in ARmedia Plugin 2.0:
More Info: AR-media Plugin[tags]augmented reality,ar-media,3d modeling[/tags]