unfortunatley neither LGPL or GPL are compatible with Irrlicht's license, as they are copyleft and force anyone who uses it to release their source code. With LGPL, this only applies to the DLL, but for GPL it also means anything that uses the library.. so if you make a game using a GPL library, you must also release the source to the whole game!
The (L)GPL are also known as "the virus" as they contaminate any source code they touch- it is okay to copy Irrlicht's code and put it into GPL software, but not the other way around. Some people release libraries in this way so they can charge for a commercial license later on
Irrlicht uses the
zlib/libpng license, which is a lot less restrictive than the GPL, but not as liberal as
MIT. Unfortunatley google code haven't got a zlib/libpng option in their list, so you should pick MIT, and make it clear that the MIT license only applies to your changes (until google code allow the zlib/libpng license)- and Niko's license should not be removed (as per
clause 3)
phew.. i think that's everything.. disclaimer: I'm not a lawyer!