An ideal augmented reality (AR) display for multi-user co-located collaboration should have following three features: 1) any virtual object should be able to be shown at any arbitrary position, e.g. a user can see a virtual object in front of other users' faces. 2) Correct occlusion of virtual and real objects should be supported. 3) The real world should be naturally and clearly visible, which is important for face-to-face conversation. We have been developing an optical see-through display, ELMO (Enhanced see-through display using an LCD panel for Mutual Occlusion), that satisfies these three requirements. While previous prototype systems were not practical due to their size and weight, we have come up with an improved optics design which has reduced size and is lightweight enough to wear. In this paper, the characteristics of typical multi-user three-dimensional displays are summarized and the design details of the latest optics are then described. Finally, a collaborative AR application employing the new display and its user experience are explained.