Screen Space Ambient Occlusion (SSAO)
Ambient Occlusion (AO) is a type of lighting technique applied in-game to create more realistic lighting. AO simulates soft shadows created by two surfaces that are close together. Ambient occlusion in games is normally accomplished through Screen Space Ambient Occlusion, which is a simplified way to fake realistic AO with shaders in a process fast enough for real-time rendering. SSAO is a Direct-X 10 shader, so it will only be available on fairly modern video cards.
SSAO works by examining an onscreen pixel, and then comparing its location in the depth buffer (i.e. how far it is away from the player) to the pixels around it. Pixels which are close together but not coplanar (on the same face) are shaded to simulate soft shadows. To maintain playable framerates, it is not possible to sample every pixel every frame, so random sampling is used, which will inevitably create noise/grain which may be more noticable when the player moves around.