I am looking for software that can enable photo realistic rendering of an environment which can then be navigated around VR style whilst still maintaining its visual quality.
Someone recommended Blender. Am I looking in the right place?
sure…but if you’re expecting it to be easy, you are in for a nasty shock.
I’m not certain if I understand you correctly, but let me give a try answering your question.
Blender is certainly capable of photo realistic rendering. Take a look at for example these pictures (the first and last one were rendered with Yafray, which can be used as a sort of plugin in blender): 1 , 2, 3.
It will take hard work though to reach that level. I don’t know what experience you already have at modelling, but don’t expect to create such things right in the first week.
The VR style without losing visual quality is a bit more difficult. You can use the game-engine (of which I don’t know very much), but that will always be of a lower quality than pre-rendered things. An example can be found here: windows-version, mac-version, linux-version
A different way to do it is by rendering 6 different images with the help of BlenderGoCubic (you can also do it manually, but it will be much more difficult), and then create a qtvr movie from it by using GoCubic. Some results of this can be found here.
If you wish to be able to turn around an object and file-size is not much of a problem (for example when creating content for a cd-rom) you can also use the 3Dnp-script . Some examples and the official site of the script developer can be found here.
I think all the examples mentioned above show that Blender is quite capable of what you want. Just remember it takes time to get there.
At first I was scratching my head a little, but now I understand what you friend ment that you can make photorealistic VR style navigation in Blender.
There isn’t a ‘photorealistic’ button in Blender, but there is something that comes very close to that. It is called “radiosity”. In a nutshell radiosity means that the scene is calculated by keeping track of the light that is bouncing around and how much is absorbed and how much got reflected. The results of a radiosity render can look quiet photorealistic, but it is a far cry from real photorealism (I’l explain later).
You can build your scene once and then use it for you navigation. That could be VRML. The radiosity calculation can take an awful lot of time, especially if you have a complex scene.
OK, for the downsides of radiosity:
- No transparant effects; a scene with a pool won’t look good here.
- You cannot animate objects here, because then the whole radiosity calculation must take place again. But you fly with the camera through our scene as much as you want (in realtime).
- No special effects like caustics, sss and so on (which render can’t do anyway)
- Everything looks dull because radiosity don’t take specular reflection into account. But you can workaround this by placing standard lamps and only let them influence specular high lights. This is not a calculation intensive solution.
In conclusion I can state that Radiosity can look photorealistic depending on the scene (i.e. materials) you want to model. It is possible to animate, but it will take your computer days, if not weeks to finish an radiosity animation (I think “the Bunny” was a radiosity rendered short film). But on the up side you can ‘fly’ with the camera through the scene, which makes it great for architectual renderings. After the radiosity calculation, you can tweak your scene with light and texture to make it look more natural.
Hope I was of any help 
I think s68 posted a good quality Quicktime VR movie a while ago.
For photoreal environments, I would use yafray. Check out PhiloVivero’s barn - that looks pretty cool and no GI used.
If you don’t mind editing the xml file, it is possible to directly render spherical panorama’s with yafray btw, can be viewed directly by programs like PTviewer and such.
Or in Blender as well, don’t necessarily need 6 images on a cube, a spherical map on a cube works as well. You can then use the game engine for that as well by centering the cube on the camera (or even just directly in Blender by using ‘fly’ mode, but then only rotating the camera)
There is a script, authored by macouno and me, to produce the correct 6 image cube to create Quicktime panoramas. It is BGC and located on Blender CVS in Bstar repository http://projects.blender.org/viewcvs/viewcvs.cgi/bstar/?cvsroot=bstar
It is renderer independant, so it waks also with YafRay (within blender)
Stefano