Lightmaps are essentially the successor of Gouraud shading—an interpolation technique for providing continuous lighting while just defining the lighting values for each corner of a triangle. The first game to use lightmaps was Quake in 1996; yet, they form the backbone of lighting in video games even today. They are usually prerendered but can also be generated dynamically, if needed.
A lightmap is applied to an object when it's being rendered as part of a multitexturing rendering pass, which means that it's applied to the regular texture and possibly other maps in a multiply-blend operation. The lightmap itself consists of lumels (lumination elements) and has a resolution defined in these lumels. Once applied to the object, this resolution is subdivided into a lumels-per-world-unit ratio. A higher ratio means a better effect, but it will take more resources to render. A balance between image quality and performance has to be looked for here.
For static (nonmoving) objects in the...