This is a great cheat for low cost 'dynamic' lights. If you bake lightmaps in passes, this is a very easy effect to author.
Essentially I combine two lightmaps; adding the dynamic map over the base map. For this demo, I do exactly that. In practical application, you would not want to double your lightmap textures space for a whole level. Instead, create a pass where duplicate chunks of localized geometry will hold low resolution dynamic maps (or even make a larger texture sheet for all the dynamic maps in your level, a 512x512 will do) and bake to a new set of UVs.
Derek Jenson Blog
My website serves to archive experiments, document projects, share techniques, and motivate further exploration & artistry in 3d space.