It's a very interesting project -- while it doesn't mean much to anyone not in Digital Harbour, the idea of bringing the iPhone into a location-specific setup is intriguing. Haines has a nice page on his site that details the process of creating the app, and you get to not only see the thought behind the process, but some of the concepts and tech behind the app as well. Very cool.
There are lots of location-specific applications that have yet to be explored on the iPhone, most of them commercial (putting your order in while waiting in line at Starbucks, for instance). But Colony looks like a really thoughtful take on the idea -- I would say that it's too bad you have to go all the way to Australia to use it, but then again that's kind of the point.