Here's how to do it:
1) Fire up Blender and set up the model.
2) Create a texture under the texture tab. If you skip this one, no render to texture will happen, make sure you do this correctly.
3) Put the seams to the model.
4) Unwrap the model.
5) Go to Bake tab and select Ambient Occlusion.
6) Hit Bake button.
7) Wait...
8. Wait...
9) Wait...
10) Save texture to jpg file.
11) Fire up IrrEdit and load the mesh model
12) First texture, load the ambient occlusion texture.
13) Second texture, load any colormap.
14) Set material type to lightmap.
15) Hit ctrl-F9 to view model.
16) Enjoy your ambient occlusion model.
no blur:
![Image](http://farm4.static.flickr.com/3276/2688738376_3afbde61d3_b.jpg)
with blurring:
![Image](http://farm4.static.flickr.com/3017/2688747096_040a625d40_b.jpg)
![Image](http://farm4.static.flickr.com/3167/2687947445_a22492fd74_b.jpg)