Yea, just look at the difference between a normal mapped model without AO and a normal mapped model with AO. One example. http://wiki.polycount.net/Ambient_Occlusion_Map#EQBM Another example. http://wiki.polycount.net/Diffusely_Convolved_Cube_Map#ECIP
Right, but I think what vargatom is saying is that you generally don't want AO to prevent direct light from illuminating the surface. For example if a character lights a cigarette in the dark, the nostrils shouldn't remain black. When AO is simply multiplied into the colormap, this kind of lighting is impossible to achieve.