Screen Space Ambient Occlusion (SSAO)
Note: Not to be confused with baked ambient occlusion on models!
Screen Space Ambient Occlusion (SSAO) works by examining an onscreen pixel, and then comparing its location in a depth buffer 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 noticeable with movement. To counter this, the SSAO pass is often blurred to remove such grain.
As with traditional AO, SSAO is completely independent of the normal lighting system. This means that both the performance and appearance of the shader are unaffected by the lights used in a level.
The depth buffer is measured from the camera, and so SSAO is view-dependent - the size and locations of the "shadows" created by SSAO may change as the player moves the camera around. Additionally, the shading may look different along the edges of the screen - this can be combated by rendering additional information outside of the current camera's bounds.
Source Filmmaker
Source Filmmaker includes an SSAO option (labelled "Ambient Occlusion"), accessible by right-clicking on the viewport. The default setting is very grainy.
SSAO in the Source Engine
Note:For baked Ambient Occlusion maps per model within the Source Engine, see $ambientocclusion.Note:A post process SSAO shader currently ships with the Source Shader Editor.Note:I am currently writing a tutorial on implementing SSAO into Source Engine here (DmitRex).