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Well this isn't too far off. Microvision Is developing Virtual Retinal Displays that use a low power laser to directly stimulate the retina. I imagine with some fine tuning you could get it to overlay the real world image. Until then you'll still have to use standard HUD technology.

As far as an input device goes, you're missing the obvious. Impliment the keyboard and/or mouse in software. The whole point to wearables is to take ubiquitous computing with you. You shouldn't have to look like a "freak" to wear a computer. Imagine something similar to the "keyboard" in "Johnny Mnemonic" Use either a head mounted camera or maybe wrist mounted EKG sensors to detect the electrical impulses to the finger muscles. That way you just move your fingers. Even today, you can use a camera to track your finger (if you've got a flourescent thimble on). You can use that for a mouse; and I imagine with some beefed up software (and probably hardware too) you could get a computer to track and interpret the the patterns
of a typing on a keyboard. (of course I'm designing this in a complete vaccuum, so I might as well say that a future wearable computer will have an integrated time travel device.)

The technology was spun off into a company: http://www.mvis.com/

They have some interesting ideas for laser projection systems as well.