looks awesome except for aliasing

it's true. I always forget it

You should add a range check to remove SSAO around the candles. Without range check it looks somewhat artifical.

For an explanation click here:
http://john-chapman-graphics.blogspot.de/2013/01/ssao-tutorial.html

Implemented a new approach for grass rendering into IceX3 editor. It's based on the shader method Superku mentioned some pages ago in this thread. I also added smooth fading out, better shading and color correction. Works incredibly fast.

The shader works like this:
- the grass is placed by vertex shader from a heightmap of the terrain
- the shading of the grass ignores self shadow gouraud shading. Instead the exact shading as the terrain is used, based on a normal map which was generated out of the terrains normals.
- the grass color is lerped into the color of the terrain texture beneath the grass. For this a diffuse texture is used, which was generated out of the terrains texture.

The shading looks too boring. You probably want to lerp between the terrain normal and the actual grass normal to make it look more interesting.

Problem is that the grass have just 2 quad polygons (crossed). With standard gouraud shading it doesn't look really good. You can see the same shading problem on the trees in the background (which are also crosses 2D sprites). I guess I have to write a special self shadow shader for stuff like this.

That´s why I proposed to interpolate the normals, so you may just use 30% of the grass normal and 70% of the ground normal or something like that. If the grass is randomly rotated it should look quite good.

I've implemented your method. The grass normals are used by 1/3 and the terrain normals by 2/3. In the far distance only terrain normals are used, because otherwise the smooth fade would not work properly.

Pretty cool and happy birthday! (Only the trees, esp. those in the background, look really weird in the sky, is this some SSAO side effect?)