Tried whatever comes to mind (and there is nothing for 2.63 on Google) to get soft shadows from the sun lamp baked and it’s not happening 
Any ideas? Thanks.
are you using cycles?
if so… play with the size of the sun in the object data tab.
Bigger size = softer shadows.
edt**
oh sorry you want it “baked” errr ummm.
not sure
ok…
using blender render…
uv unwrap your ground plane…
create a material for it make it kinda big like 2048x2048 at least… (for soft shadows)
Call it “Ground Shadow.png” Make sure the Texture is White. (Or an Alpha)
then create a material for the plane, create a new texture, image texture, UV, open “Ground Shadow.png”
Go to render setting bake mode, set it to shadow…
(Before you do the last step make sure you like what it looks like, before you bake it do a few test renders.)
You can change the soft shadow size and samples in the object data tab.
edit
you can use a smaller texture size and get a better bake if you use
“Constant QMC” in the Sun Object data tab, and turn up the samples quite a bit as well.
Nope, not working
are you saving your image texture? make sure you do.
Create the image texture with uv image editor, then save it.
It should work i just did it here to confirm…
what does it look like when you set it to multitexture
is the shadow inverted or whats wrong? (how did you unwrap it)
project from view(bounds) from the top view should work then…
minimize stretch, pack islands…
edit on a dense ground plane you may not want to use minimize stretch…
(could cause blender to crash), project from view bounds should do…
for that type of scene try, samples 20, soft size 60,Constant QMC
you can change the margin in the bake to about 5 or so… it may take a little time to bake…
look at the icon on your taskbar it has a progress indicator.
Hmm. Worked OOTB for me.
Added Landscape, set Sunlamp, added empty texture, baked, applied texture to shadeless duplicate of mesh:
Then again, I wonder why you keep posting all your tech support stuff in CG Discussion.
@holyenigma74: I used project from view (bounds) and minimized stretch for UV map. Now I am seeing arexma’s screenie and it’s about the same thing I get. So maybe I don’t understand something about shadows or I need to combine shadows and AO to get proper results.
@arexma: I rarely get any replies in the support forums, because it seams knowledgeable people read only this section of the forum and not the support sections. And the only people who are in support sections (for the most part) are the ones who can’t help. That’s what it seems to me, because I get help here more often and sooner 
Moved thread to Support forum.
motorsep, please use the correct forum in the future. Note that it is simpler for me to just delete a post than to move it to the correct forum and I don’t like making my life anyome difficult than I have to !!
Is it possible that you’re not differntiating shading and shadow?
My screeny shows shadows, soft shadows for that matter and that’s what you asked for.
I definitely differentiate between shading and shadows 
In that case I don’t see what troubles you…
Shard edges on the shadows. Maybe it’s due to low poly nature of the mesh?
I am not entirely sure I understand, but you mean that the soft-shadows are not so soft at certain edges?
That’s accurate. I am sure you know how soft shadows are calculated. If you take a summit with a slope and light it you can only have soft shadows where the summit casts it’s shadow, directly after the peak into the shadow it will always be a hard shadow.
ahh, gotcha
Just a quick schematic for those who have no idea how soft shadows work and what this is about.
You can see that the tip of the mountain is the start of the shadow, but not considered an “edge” of the shadow and not soft for obvious reasons. It’d also be odd looking if you had a soft shadow bleeding into the fully lit slope.
The shadow at the other side should start with a soft shadow though. I guess that’s a limitation and depends on the implementation of the soft shadow algorithm.