LittleJohnny
Newcomer
Someone asked this a few pages back and probably only the developer can answer this, but based on the developer's description it sounds like they're using Inferred Lighting...
http://graphics.cs.uiuc.edu/~kircher/inferred/inferred_lighting_paper.pdf
http://graphics.cs.uiuc.edu/~kircher/inferred/inferred_lighting_paper.pdf