This paper describes the design, development and testing of an AR system that was developed for aerospace and ground vehicles to meet stringent accuracy and robustness requirements. The system uses an optical see-through HMD, and thus requires extremely low latency, high tracking accuracy and precision alignment and calibration of all subsystems in order to avoid mis-registration and “swim”. The paper focuses on the optical/inertial hybrid tracking system and describes novel solutions to the challenges with the optics, algorithms, synchronization, and alignment with the vehicle and HMD systems. A system accuracy analysis is presented with simulation results to predict the registration accuracy. Finally, a car test is used to create a through-the-eyepiece video demonstrating well-registered augmentations of the road and nearby structures while driving.