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Michael Abrash wrote in his blog on Valve’s website what his work is based on and it is quite similar to what Google is looking at with their augmented reality glasses.

By “wearable computing” I mean mobile computing where both computer-generated graphics and the real world are seamlessly overlaid in your view; there is no separate display that you hold in your hands (think Terminator vision).

While this is very interesting, it still remains to be seen where Valve intends to be involved with this project. Steam is pushing out from the desktop PC to the home theatre with their Big Picture UI and what that could potentially spread out into.

It is entirely possible that Google and Valve both see some link between Steam/Google TV and Wearable Computers/Augmented Reality glasses that we are just unable to perceive yet and are lunging for the same target. While the blog posting is very interesting, it still reveals little about the technology itself.

Also, this announcement does not mean that Valve is not working on a hardware platform to accompany The Big Picture, it just says more about what Valve is currently working on in secret. The previous rumors could still have some shred of truth in them.
From PC Perspective