Schulte Software Development has released Funny Faces, one of the first Mango apps to use augmented reality.  Using your phone's camera, Funny Faces will detect people's faces and overlay your choice of ridiculous head wear.  Choose from Afros, mustaches, different hats, or the famed internet hero himself, Chuck Norris. 

Once you have sufficiently sillied-up your target, Funny Faces allows you take a picture with the camera and save it to your photo album.  Better yet, you can share your snapshot with friends  directly via email, Twitter and FaceBook.  There are already quite a bit of overlay options, with more on the way. The devs are also asking for suggestions, so if you have any ideas, feel free to share them right through the app itself.

You can get Funny Faces from the Marketplace for $.99, or try it free first.  The trial version has a few overlays to try and a one-time ability to save/share your creation.