An augmented reality system, comprising: a light source configured to generate a virtual light beam, the virtual light beam carrying information for a virtual object; a light guiding optical element, the light guiding optical element configured to allow a first portion of a first real-world light beam (306, 312) to pass therethrough, wherein the virtual light beam enters the light guiding optical element, propagates through the light guiding optical element by substantially total internal reflection, and exits the light guiding optical element; and a lens disposed adjacent and exterior to a surface of the light guiding optical element, the lens comprising a light modulating mechanism (1102, 1104, 1106, 1108) configured to attenuate a second portion of the real-world light beam (306, 312b) and to allow the first portion (306, 312b') of the real-world light beam (306, 312) to pass through the lens. wherein the light modulating mechanism (1102, 1104, 1106, 1108) comprises: a liquid crystal layer; first and second electrodes (1106A, 1106B) disposed adjacent to and on opposite sides of the liquid crystal layer; first and second compensation films (1104A, 1104B) disposed adjacent and exterior to the first and second electrodes (1106A, 1106B), respectively; and first and second polarizers (1102A, 1102B) disposed adjacent and exterior to the first and second compensation films (1104A, 1104B), respectively, characterized in that the first and second polarizer (1102A, 1102B) each includes a plurality of regions (R1, R2, R3, R4) configured to impart different degrees of polarization on light passing therethrough, wherein the liquid crystal layer is configured to impart a degree of retardation or polarization rotation on light passing therethrough in response to a voltage applied by the first and second electrodes, and wherein the degree of polarization imparted by the liquid crystal layer is proportional to the voltage applied by the first and second electrodes (1106A, 1106B), and in that the lens is a gradient tinted lens configured to reduce more real-world light at a top portion thereof compared to a lower portion thereof. a light source configured to generate a virtual light beam, the virtual light beam carrying information for a virtual object; a light guiding optical element, the light guiding optical element configured to allow a first portion of a first real-world light beam (306, 312) to pass therethrough, wherein the virtual light beam enters the light guiding optical element, propagates through the light guiding optical element by substantially total internal reflection, and exits the light guiding optical element; and a lens disposed adjacent and exterior to a surface of the light guiding optical element, the lens comprising a light modulating mechanism (1102, 1104, 1106, 1108) configured to attenuate a second portion of the real-world light beam (306, 312b) and to allow the first portion (306, 312b') of the real-world light beam (306, 312) to pass through the lens. wherein the light modulating mechanism (1102, 1104, 1106, 1108) comprises: a liquid crystal layer; first and second electrodes (1106A, 1106B) disposed adjacent to and on opposite sides of the liquid crystal layer; first and second compensation films (1104A, 1104B) disposed adjacent and exterior to the first and second electrodes (1106A, 1106B), respectively; and first and second polarizers (1102A, 1102B) disposed adjacent and exterior to the first and second compensation films (1104A, 1104B), respectively, characterized in that the first and second polarizer (1102A, 1102B) each includes a plurality of regions (R1, R2, R3, R4) configured to impart different degrees of polarization on light passing therethrough, wherein the liquid crystal layer is configured to impart a degree of retardation or polarization rotation on light passing therethrough in response to a voltage applied by the first and second electrodes, and wherein the degree of polarization imparted by the liquid crystal layer is proportional to the voltage applied by the first and second electrodes (1106A, 1106B), and in that the lens is a gradient tinted lens configured to reduce more real-world light at a top portion thereof compared to a lower portion thereof. a liquid crystal layer; first and second electrodes (1106A, 1106B) disposed adjacent to and on opposite sides of the liquid crystal layer; first and second compensation films (1104A, 1104B) disposed adjacent and exterior to the first and second electrodes (1106A, 1106B), respectively; and first and second polarizers (1102A, 1102B) disposed adjacent and exterior to the first and second compensation films (1104A, 1104B), respectively, characterized in that the first and second polarizer (1102A, 1102B) each includes a plurality of regions (R1, R2, R3, R4) configured to impart different degrees of polarization on light passing therethrough, wherein the liquid crystal layer is configured to impart a degree of retardation or polarization rotation on light passing therethrough in response to a voltage applied by the first and second electrodes, and wherein the degree of polarization imparted by the liquid crystal layer is proportional to the voltage applied by the first and second electrodes (1106A, 1106B), and in that the lens is a gradient tinted lens configured to reduce more real-world light at a top portion thereof compared to a lower portion thereof.