What Frank is describing is what projective texturing is. The 3rd Thief game and Splinter Cell games used it as do many more modern and semi-modern games. It simulates complex shadow situations by projecting a sprite (or whatever) onto a surface (like a light shining through a complex fence or stain glass windows). It looks like the dynamic lights are causing all of these cool looking shadows but in reality it's just a texture being projected....in other words a faked shadow.

Matt created a projective texture shader years ago, but it's old and slow, and he's supposedly working on a new one and probably for Sphere 3.

Maybe, it is all the same thing, though.