This has to be the coolest app made for the iPhone yet.  Word Lens uses augmented reality to instantly translate printed words from one language to another.  It’s simple: Hold up your phone’s camera to a sign containing foreign words and the app will convert it to your native tongue on-the-fly.  This terse explanation doesn’t do the app justice; you’ve gotta watch the demonstration above to get the full effect.

An app so powerful has to have limits, right?  Word Lens only supports Spanish-to-English and English-to-Spanish translation for now and it cannot read very stylized fonts, handwriting, or cursive.  The demonstration shows the app working quite flawlessly; realistically there will be times when conversions are not 100% accurate so the developer (Quest Visual) allows users to manually type in words to find translations.  But here’s a plus: the app does not rely on network or Internet connectivity to make translations happen.

Word Lens is available now as a free download in the App Store; however you must pay $4.99 for an in-app purchase language pack to get things started.  It’s compatible with iPhone 4, 3GS, and the latest gen iPod touch.