I saw this augmented reality sandbox using a xbox camera and thought it looked pretty amazing.  The cut and fill with contours automatically added would make site work a lot of fun (though clearly a long way off if ever)

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http://www.youtube.com/watch?v=7kVBFlwh0Ok

from the website:

" The resulting augmented reality (AR) sandbox allows users to create topography models by shaping real sand, which is then augmented in real time by an elevation color map, topographic contour lines, and simulated water. The system teaches geographic, geologic, and hydrologic concepts such as how to read a topography map, the meaning of contour lines, watersheds, catchment areas, levees, etc."

 
http://idav.ucdavis.edu/~okreylos/ResDev/SARndbox/