First off, let’s give you a brief run down of how light is calculated. On a very basic level there are two main factors in a lighting equation – ambient and diffuse light. The ambient light is the amount of light which is always present in the scene (e.g. if the sun is behind a cloud, or the amount of light in areas of shadow). This is essentially light from the sky. The diffuse lighting adds a directional component, such as the sun, which is added onto the ambient light. Essentially this gives us a minimum and a maximum light level (minimum being the ambient, maximum being the ambient plus the diffuse). How this relates to the pictures is as follows.
In reality, the level of ambient light is not constant. For example, if the sun is behind heavy cloud, then the level of light in the middle of an open field will be greater than that in an alley-way. This is because the buildings either side of the alley-way occlude the sky (i.e. block out some of the light). This ambient occlusion value can be calculated in our lighting tool and stored per-vertex on the models. The first screenshot shows a car wheel with no ambient occlusion (i.e. constant level of ambient light). The second pic shows the same wheel with the intensity of the ambient light from before turned down on a per-pixel basis, depending on the ‘up’ direction at that pixel (upwards facing pixels are lighter than downward facing ones). Finally, the third picture is the full monty. This one takes into account the ambient occlusion that results from the wheel itself, so the disc and bits behind the spokes have an even lower level of ambient light because the spokes themselves block out light