Good Morning!
Thx Ferret! Read this. This is the best description. Occlusion or Ambient Occlusion is simular to the SkyLight u can find in MAX.
Ambient Occlusion simulates the diffuse sky shadows u have everywhere in the real world. Its a technic that used in the SFX Industry since a long time, used by ILM (Industrial Light and Magic) and many more.
Now, many Gamedevelopers used this technic to add realism to Lowpoly Models in there Textures. Means adding diffuse Shadows to the Texture.
But read more here..
http://en.wikipedia.org/wiki/Ambient_occlusion
cheers,
mdS