Innovation is anything that is new, useful, and surprising. "Surprising" means that the idea makes you slap your forehead and say, "Gee, why didn't I think of that?"
Here's a great example. Researchers at the MIT Media Laboratory and the University of California at Berkeley have developed a new display technology that automatically corrects for vision defects — no glasses (or contact lenses) required. It is a classic and clever example of the Divison Technique, one of the five techniques in Systematic Inventive Thinking.