I just skimmed through the video again and it wasn't as bad as I remembered. However I do still have some critique: 1. The example models and textures are horrible (no big details on the highpoly, crappy UVs, no silhouette). You admit this yourself, but even so I think you could use some models and textures you've got…
Depends on the engine. Typically you multiply the Ambient Occlusion into your diffuse to give it extra shadowing depth. Engines like UDK and Cry Engine also have in-engine AO that gets applied to your model based on your mesh itself. Combined with an AO map it can really improve the look of a model. Gloss maps are used in…
If you bake out an AO map correctly (normalized) it will be mostly white with darker (black) shadows. To use this texture you simply multiply it on top of the other textures. It works the same for in Photoshop and UDK, just set the layer to multiply or use a multiply node. With a working AO-map you should not need to…