I think that image recognition, and in a way image processing, are the next low hanging fruits for AI and computer science in general. I really think that the next really amazing mainstream applications will come out of this area.
Just have a look at the following recent developments: The most amazing is probably Microsoft's Photosynth, an application that constructs a 3d model from many snapshots of the same scene. Or research into an application that can automatically make a picture of a person more beautiful [German]. In a related development HP is already offering a tool that can automatically make you look slimmer. Newer Canon cameras already automatically identify faces in a picture (and then focus on them). Google recently bought a company that focuses on face recognition to make your image collection searchable by person. And finally, on the Riya website (the pioneers of face recognition for personal use) we can see how a next generation visual search engine could look like.