In order to see any objects in a virtual world, there need to be light. Lights in 3D models attempt to simulate lights in the real world. Typically, they have an intensity, a colour, and a location.

Ambient light

Omni-directional light placed at infinity. Ambient light simulates reflected daylight (e.g. sunlight). It is an entirely artrticial kind of light (the real world doesn't work like this) but it is useful since it provides an easy way to set the light level of a scene. Some 3D systems implement ambient lights as lights in their own right, whereas others only permit other lights to have ambient properties. Note that scene that is lit by purely ambient light will look flat since all surfaces will be lit equally from all directions.

Directional light

Directional light is light with direction and is positioned at infinity. It uses less processor power than spot lights and point lights and is the most commonly used to light interactive 3D scenes.

Spot light

A spot light is a light with a direction and location that produces a cone of light. Spot lights have a number of properties including spread, drop off and decay. The spread defines the width of the cone, the drop off defines how the light fades at the edge of the cone (from hard to soft), and the decay defines how far the spot light has an effect.

Point light

A point light radiates light in all directions from a specific location (like a lightbulb, except the light radiates from a point and therefore has no size/form). Like directional lights, point lights are very common in 3D models, however it is more processor intensive. Point lights are probably the most commonly used lights for ray-traced scenes. Point lights usually have a decay property.

Shadows

Some systems are capable of rendering shadows, although that option is usually turned off because it is so processor intensive. Ray traced shadows are the most accurate, but of little use for interactive worlds with dynamic lighting. Other methods (such as depth maps, or even just texture map or transparent geometry 'shadows' underneath objects) are much less accurate but nevertheless add realism to a model.