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:
“Radiosity is a global illumination algorithm used in 3D computer graphics rendering. Unlike direct illumination algorithms (such as ray tracing), which tend to simulate light reflecting only once off each surface, global illumination algorithms such as Radiosity simulate the many reflections of light around a scene, generally resulting in softer, more natural shadows”
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:
“Geomerics real-time lighting technology incorporates all of these effects in an ‘infinite bounce’ setting. Lights can be moved dynamically, so characters exploring a scene with a torch, for example, can now experience the scene being lit as it would be in the real world. Furthermore, artists can create lights dynamically to ensure that scenes are lit the way they intended, in a similar manner to movie sets.
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.”