what do you mean with polygon/blockish? any screenshots? <edit> maybe you used [lightmap uvpack] for unwrapping (which doesn't seem to keep adjacent faces together where it makes sense)? [smart projections] worked better for me. </edit>



i played around with it too. render baking doesn't seem to support multi sampling yet in blender. other than that it works quite well though. you could bake a bigger image and scale it down or blur it a bit to get rid of the jaggies.

gile[s] also supports global illumination which blender can't bake into a texture yet.