This video is from a paper being given at SIGgraph Asia 2011 by Kevin Karsch, Varsha Hedau, David Forsyth, Derek Hoiem called Rendering Synthetic Objects into Legacy Photographs.
Unlike the photoshopping and fiddling with blemish stuff that is giving photo manipulation such a dubiously bad reputation, some of the work with augmented reality and object rendering is really based on sound understanding of the theory. In Kevin’s case above clearly the process is following the source of light and shadows in a truly natural way. I am all for this type of technical improvement but we may have to tolerate more public scepticism of good “photographic” methods as this and similar techniques become tools of the less ethical fakers.
By the way, incorrect shadows and lighting on a subject are the easiest way to detect shoddy photoshoped heads on the wrong bodies etc. Now it is our job, as honest photographers to be open with the methods we apply (and I’m certain the above methods have some very great legitimate application), whilst at the same time helping to detect and expose the low-lives who are out to deceive us?