My coworker Bill introduced me to ARToolKit, a programming toolkit for working with augmented reality and webcams. From the website:
ARToolKit is a software library for building Augmented Reality (AR) applications. These are applications that involve the overlay of virtual imagery on the real world. For example, in the image to the right a three-dimensional virtual character appears standing on a real card. It can be seen by the user in the head set display they are wearing. When the user moves the card, the virtual character moves with it and appears attached to the real object.
Without seeing this in action it is difficult to explain. The girl in the photo is holding a piece of paper in her hands. The little character that you see is created by the computer and injected into the picture. As she rotates or moves the piece of paper, the computer moves the 3d model. It appears as if the 3d model really exists in your view.