Love this tutorial on diffuse/soft lighting in Second Life from Beev Beev, the same SLer who created this great tutorial on environmental reflection. It's an immersive demo in which the person behind Beev doesn't talk, just posts instructions through SL chat, so you'll probably want to click full screen to read those.
RL work warning: Contains non-sexual nudity, though the nuclear pasties are kinda kinky.
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