Pablo Valbuena is a spanish artist that since 2007 has been working with augment reallity. He has developed his first projects in the medialab-prado of Madrid.
Here are the three videos of the projects that he has done so far.
This is a good reference for seing how space can be modifyed and how we can interact with it using video projections.
Plaza de las Letras 2007
Plaza de las Letras from tv.edgargonzalez.com on Vimeo.
The Hague City Hall video 2008