It seems that a company called Geomerics has developed an algorithm that allows real time radiosity lighting in fairly complex environments. They support nearly all the things you would expect, like soft shadowing, infinite light bounces, colour bleeding:
If you don’t know what radiosity is:
Since you of course know how radiosity works you can imagine that it’s dead slow. And getting it up to real time is the important thing about the new algorithm.
They demonstrate their technology in a short movie:
Our technique also supports real-time area light sources, smooth soft-edged indirect shadows, projected lighting, spot lights, colour bleeding and texture-based lighting effects such as normal and bump mapping.”