Scientific American reports, "Mere months after making a technologically feasible proposal, researchers have demonstrated a rudimentary example of an invisibility cloak." The object is made of metal and wires embedded in fiberglass, it makes light act weird. David Schurig and David Smith of Duke University, along with other colleagues, designed concentric rings of the "metamaterial" that bend microwave radiation around the innermost ring, "like water flowing around a stone."
Schurig says, "We've reduced both the reflection and the shadow generated by the object, and those are two essential features of the invisibility cloaking." See Science, November 10th issue for more details. "Getting the technology up and running was easier than they anticipated, the researchers say, but don't expect Harry Potter's cloak anytime soon," page 28, Scientific American, January 2007 issue.
Minan Chameleon Battle Skin--maybe not too far off.
Update, December 2011:
"Defense contractor BAE Systems field-tested an invisibility cloak in July that can make a tank look like a car, a boulder, or even a cow. Onboard infrared cameras scan the surrounding scene, and thermal tiles covering the tank display that imagery, causing the vehicle to blend in with its environment," The Year in Science, Discover, 100 Top Stories of 2011, page 47.
This technology is the very similar to the fictional technology described in Over the Edge: The Beginning, the first volume of the series published in 2004. The series is presently being rewritten in order to reboot with a new publisher.