ARToolkit is an excellent starting point for developing Augmented Reality applications. The demo applications are impressive right out of the box. You can download the toolkit from the ARToolkit homepage.
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.
Another useful tool for use in conjunction with ARToolkit is the ARGUI interface. Check out Lief Oppermanns page for more information and detailed install instructions (German).