I was messing around with UDK but I still preferred Hammer more but I remember that in one of these videos it shows UE3 having baked in global illumination and I wondered if the lighting for the Source engine uses global illumination. Does it?
I believe so. If the surface is slightly reflective, it will cast onto the wall a bit. i.e. a room of tile, with a light near an orange semi-relfective surface will make the orange appear on the ground.
Try it. Orange dev box ontop of grey dev floor.
Another interesting question, does Source have a small amount of light pollution?
What kind of light pollution like from models or sky box light pollution?
Source uses baked lightmaps calculated by radiosity algorithms. By default the compile tools do 8 light bounces of 16x16 pixel “luxels” from a given light source. Light color can be slightly changed depending on the color of the surface it bounces off of, as it does in real life.