This is an excellent idea, but as currently designed isn't very useful. It only recognizes and translates a single character at a time, which given the fact that most words and concepts in chinese are made up of two or more characters that may or may not be related to the individual characters, renders HanYou fairly useless compared to the translation ability of, say, Google Translate. Also, the camera often misreads characters, especially if they're in anything other than a very standard, typed font.
If HanYou could be improved by: (1) adding recognition of full sentences or phrases and translating all of it together, and (2) improving recognition of characters, HanYou would blow other translation apps out of the water.