This is simulating Final Gathering with bounces.
I first rendered this picture:

Then "collapsed" it to textures and rendered it again at various settings:

FG Accuracy 1000, Min rad 0.01, Max rad 0.1

FG Accuracy 2000, Min rad 0.01, Max rad 0.1

FG Accuracy 2000, Min rad 0.01, Max rad 100
Notice that while the quality difference between the last two images is almost negligible except for the ceiling the latter one was Significantly faster to render. I think the best results are probably attainable by using a large max radius and more rays to compensate. And from thoughts to actions, here's one more pic:

FG Accuracy 3000, Min rad 0.01, Max rad 100
With some tweaking I'm pretty sure this technique could be used to get very clean results for a cornell-box type scenario, but because this depends on manually making textures from the first pass it's totally impractical for anything except the most simple scene. That is of course until (hopefully) the jolly guys at Softimage and mental images build support for such a feature.
I think that with a good implementation of FG with bounces (and a bit more control in general) we could just about do without GI, and even if not it would certainly add to the options. Caustics would still depend on photons, but that's another story.
Comments?