I already posted a YouTube video of this and it instantly got an awesome response from viewers, without even knowing what actually are they looking at.
Regular Cube Environment Mappingis a very common technique of making fast fake reflections. It works best in outdoors, when reflecting distant skies and stuff that reaches to infinity, but looks very wrong in indoors, especially on flat surfaces, like walls and floor. It is caused by cube-map coordinates that reaches to infinity.
What BPCEM basically does, it takes the cube-map coordinates and clamps them to the size of the room. The original thread about BPCEM is HERE. It is made by Bartosz Czuba http://devlog.behc.pl/ and thanks him for helping me get this to work in BGE.
comparison stills (regular cube mapping vs BPCEM):
regular cubemap still looks fine on spheres, but wrong on flat surfaces.
video of shader in action
and a blend file of course: bpcem_playground.blendit is for 2.49, but should run fine on 2.5
mouselook: WASD + mouse (player can walk through walls :))
shoot a sphere: LMB
shoot a lot of spheres: MMB
1: Remove AA (Antialisaing)
thread about AA filters listed above is here - http://blenderartists.org/forum/showthread.php?t=209574
PS. I haven`t tested this on ATI cards.