Here's how it works: you get out of your car and mark your position, making sure you have a good GPS fix. If you don't have one, you'll be told that and see the accuracy of your fix in plus or minus meters.
You can give your location a name, and if your parking space is numbered, you can add that in. I guess that is helpful if you are parking where there is no GPS signal, but then this app won't be of much help.
You're then free to go your merry way, until it's time to find your car again. When you bring up the app, your iPhone camera is activated, and a red arrow points to your car. Swing the camera around until an icon for your car appears and start walking. You'll get a constant read-out of your distance.
In my tests, just after sunset, the app worked very well, although when I got right next to the car the arrow was pointing elsewhere. That's not surprising given the imperfect accuracy of GPS, but by the time I got the error I could see the car less than 25 feet away.
Car Finder is U.S. $0.99, so it's not over priced, and pretty much in line with other similar apps in terms of cost. The augmented reality is a nice touch, as it floats your car icon over the real world. You do get a legal warning from the app about using due caution, I guess so you won't step into a manhole or off a cliff while following the camera scene. What a litigious society we live in!
So, Car Finder works, isn't over priced, uses augmented reality which has a high 'buzz word quotient,' and should impress your non-iPhone using friends, if you have any.
You'll need an iPhone 3GS to make this work, because the compass and GPS do the heavy lifting.