I've been working a lot in the Augmented Reality space, and was very excited for AR when the Lumia 900 shipped with a Gyro - Finally a full-motion sensor windows phone that sells in large numbers.
However, I've found that the sensor fusion algorithm that the Lumia phone applies is horrible at best. It basically doesn't take proper advantage of the gyro.
The sensor fusion is a mix of 3 sensors:
Accelerometer, Compass and Gyro. 1st generation windows phones didn't come with a gyro, and made the AR experience really poor.
The purpose of the Gyro is two things:
1. Reduce the noise coming from the accelerometer
2. Detect fast rotational changes (to compensate for the compass which is slow to update).
#1 works fine on the Lumia 900, and I don't see a lot of noise. However, #2 is almost non-existent, and the gyro get way too little weight on a fast rotation. This gives a really poor user-experience when doing augmented reality apps (including Nokia's own City Lens app) because any movement shows huge lag when rotating, and it makes it almost impossible to play fast-paced games based on AR.
To demonstrate what I mean, I have recorded a video that compares an HTC Titan to a Lumia 900. I've been able to reproduce this on several Lumia's, and I haven't seen a single other phone with a gyro that has so poor responsiveness. http://www.youtube.com/watch?v=_lEIpkBT4r4
The HTC phone is on the left, and Lumia 900 on the right. Notice that when the phone is tilted fast, the labels on the screen instantly moves on the HTC, but on the Lumia they slowly move towards the right position.
You should be able to reproduce this with any augmented reality app, for instance the AR view in my GuidePost app:
I believe the Lumia fusion sensor firmware is due for an update...