   Volume lighting
  By which I mean the technique where a grid of light probes are placed over the scene, which get their recieving light calculated, and this is then used as data into a shader to light objects, by interpolating the probes surrounding objects.How do you prevent light bleeding? such as in the case of a wall with probes on each side, and objects on each side. The objects shouldnt receieve light from probes that are blocked by the wall.
  check out the light propagation volume paper from Crytek, it shows how to reduce the bleeding:http://www6.incrysis.com/Light_Propagation_Volumes.pdf;By which I mean the technique where a grid of light probes are placed over the scene, which get their receiving light calculated, and this is then used as data into a shader to light objects, by interpolating the probes surrounding objects.How do you prevent light bleeding? such as in the case of a wall with probes on each side, and objects on each side. The objects shouldn't receive light from probes that are blocked by the wall.The bleeding problem is a function of the resolution of the volume intersected with the world.  If the resolution is good enough then you only need the level geometry to be aligned to your grid well enough to minimize the bleeding.  However a good enough resolution for that would make the memory requirements enormous, and you would probably need to LOD out the far away stuff or stream the data in a limited way around the camera.One of our projects is doing some work on this topic, and our solution is to stream the data as you walk around the environment, as we are doing a lot of tight indoor environments, and had to come up with something different than Crytek as their stuff is really only suitable approximating the light for directional lights an any kind of time-efficient manner (esp in relation to the current console generation), and we are running a lot more point and spot light sources and primarily in indoor environments.Volume textures also have their own pitfalls (make them too big they waste an enormous amount of RAM for pixels off screen, make them too small they waste an almost equally enormous amount of memory on certain hardware like the XBOX360)   ;  You could group the probes by "room", and when selecting probes to affect an object, only accept ones matching the same room.   