I baked ambient occlusion on in 3DS Max, it looks so good because it's a 2048x2048 map with high samples and settings across the board. It took a while to render out on all of them, but I'm happy with the results. The advantage is that the lighting looks good and doesn't need to be computed in real time. The disadvantage is that it takes up a lot to texture memory to be able to look good. They still look good when you move the sun/shadows around.
You can get more accurate results by combing AO for close up, Indirect Lighting for wider details, and Sky Lighting for broad illumination plus direct lighting and shadows. Like I talk about in the thread I made here: http://www.outerra.com/forum/index.php?topic=1548.0
You can really see how GTA looks great with that combination and that is all done in real time with no baking, it also changes based on sun position. Although I do like how Outerra lights the models already.
Actually for now, I think baked AO is the way to go for buildings. Here is a screenshot of the scene with different lighting.