How will this affect Real Estate? This is one more step in making the Home Buying process simpler. Now if you don't have time to drive through a neighbourhood and see what it has to offer check out Street View to look for parks, schools, churches, etc. Combine Google Street View with Walkscore and quickly learn about new neighbourhoods.
This technology will never make actually going to view a home obsolete but (hopefully) it will make the home buying process a bit simpler.