Case in point, Francesco I. Cosco's work presented at ISMAR09 (which reminds me that ISMAR 2010 is less than two weeks away!). In this work, Cosco and other researchers from the University of Calabria, Italy and the Rey Juan Carlos university in Spain, tried to add haptic interaction to an augmented environment. Problem is, haptic devices are visually not attractive, and aren't really a part of the scene. The solution they came up with was quite 'magical':
More details on Cosco's home page.
Cosco F. I., Garre C., Bruno F., Muzzupappa M., Otaduy M. A. "Augmented Touch without Visual Obtrusion". Proceedings of the IEEE International Symposium on Mixed and Augmented Reality 2009.