readwriteweb is one big continuous press release. Yelp scored with this one. It's all a game.
That said, I personally think AR will be absolutely freaking massive so it's actually good to see them trailblazing in this new space. Kudos.
edit: Actually, I think AR will obliterate much of what we know as the web today. I advise HN peeps to go watch a japanese show called Dennou Coil. That's the future right there and if you don't believe me, go watch anyone playing nintendogs on DS.
Just tried it, even with the compass it's still a bit halfassed. The internal compass simply isn't accurate enough for this - and the margin of error is huge. I have had the iPhone think I'm facing in the direct opposite way.
IMHO we can't get true AR until we actually start making sense of the picture coming into the camera.