See Crysis developer Crytek's tech demo of 'Cascaded Light Propagation Volumes for Real Time Indirect Illumination' for the i3D 2010 symposium.
Crytek explains that "the LPV technique was extended to support secondary occlusion and multiple bounces. The propagation scheme is improved and compared to similar Discrete Ordinate Methods." What does that mean? It's a video of pretty things.