Ray Kurzweil wrote an article recently for the Science & Theology News which mentions his predictions about nanotechnology:

Rob Freitas [a senior research fellow at the Institute for Molecular Manufacturing] has designed a nanorobotic red blood cell, which is a relatively simple device - it just stores oxygen and lets it out. A conservative analysis of these robotic respirocytes shows that if you were to replace 10 percent of your red blood cells with these robotic versions you could do an Olympic sprint for 15 minutes without taking a breath or sit at the bottom of your pool for four hours.

...The most interesting application of computerized nanobots will be to interact with our biological neurons. We've already shown the feasibility of using electronics and biological neurons to interact non-invasively. We could have billions of nanobots inside the capillaries of our brains, non-invasively, widely distributed, expanding human intelligence, or providing full immersion virtual reality encompassing all of the senses from within the nervous system.