This is an incredibly cool technology, and the basic idea is pretty simple: You take a RGB LED, modulate the intensity of the red green and blue diode so that the light output matches the scanlines of your projected image. Then you project it onto a mirror mounted on a piezo electric crystal which oscillates to match the scanlines. And voila - you have a projector.
The inhibiting factor has been that RGB LED's have been quite expensive but they are rapidly dropping in price. The blue ones are particularly pricey.
they might be bigger ones, or better focused ones (I'm guessing). The ones you're thinking of are mostly used as indicators, so I'm guessing it doesn't matter where they shoot their light.
But that aside, there are a couple things that the article failed to mention. The obvious use is to watch TV and movies on it. However, I remember other interesting research uses for projectors.
The first well-known one is a major part of a multi-touch display. Of course, with OLEDs, it might be possible to make one without a projector--it just won't be as big.
Second, Johnny Lee, in addition to his Wii IR goggles, has previous projects, where he can detect the orientation of portable display surfaces (like a small board) by projecting gray codes. He cheats a little by having photo sensors at the corners of the small board, but the idea is to be able to project onto any surface, and for the projects to 'follow' it, as you move it around.
http://www.cs.cmu.edu/~johnny/projects/thesis/
As a curiosity, there was a paper on HN a long time ago about seeing the back of a card. It used a projector to project patterns(gray codes again, I think), on the card, and a camera to read the reflection of the color off a book page facing the back of the card. Doing this, they were able to reconstruct the image of the card.
Lastly, it doesn't have to be a projector of visible light. If you had another 'channel' to project into your environment from your phone, you can probably detect what's out there
I personally want contact lenses that does augmented reality. because one is in each eye, it should be possible to create the illusion of floating displays in the air. That way, you can see it, an no one else would.
The inhibiting factor has been that RGB LED's have been quite expensive but they are rapidly dropping in price. The blue ones are particularly pricey.