The application works by assuming a constant viewing angle (35-45 degrees), typical for when the device is placed on a tabletop. The 3d scene's perspective is then warped using anamorphic perspective, making the object appear to jump off the screen.
iHologram - iPhone application from David OReilly on Vimeo.
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That's a ipod touch, not an iphone. But still neat.
ipod, iphone, thats the same shit