I too am inspired by all the possibilities this implies for human-computer interaction. I picture a portable device that records events from your surroundings and provides personalized reasoning similar to this. It could remind you of people's names, it would know all the details of your personal finances and could provide budget and stock tips, remind you of events if you have a pattern of forgetting to plan ahead, etc. Aside from the fact that Watson fills up a whole room and its knowledge is tailored to Jeopardy, it really doesn't seem that far off combined with a few other technologies like machine vision and translation that are already out there.

Have you seen Qwiki? http://www.qwiki.com/