It seems in Modern Warfare 2 things other than enemies bleed as well: the walls. I believe, this is the first case of real-time color bleeding (Mirror’s Edge has the best pre-baked color bleeds par none) in video games and it really is an amazing effect. In situations like this, the MW 2 –engine truly excels and the Favela level is the prime example how gorgeous video game can look on these days. Infinity Ward – regardless all the recent drama – posses some impressive technology and pure skill, I can tell you that.
Of course we are not dealing with genuine radiocity here, but either way, MW 2 fakes it pretty damn well.