Greg Sterling explains it well at Search Engine Land as "Bing Maps breaks new ground in online mapping even as it plays a bit of catch up with Google."
The augmented reality comes in where Microsoft overlays data on those maps in a more social way. Microsoft explains:
Photosynth and Silverlight are the underlying technologies in Bing Maps that connect everything and help provide the more seamless experience. Based on Seadragon and Photo Tourism concepts, Photosynth lets us literally “stitch” together photographs to provide more realistic view of locations as they appear in real life. Photosynth-enabled Streetside imagery is built on geometric models that are reconstructed underneath the imagery to provide a truly 3D experience that shows locations as they are in real life.
The screen shots at the various blogs are neat, the only downside is the requirement to install Silverlight (I am a mac user). For more coverage of this, see Techmeme.
Forum discussion at WebmasterWorld.