Hey no problem, glad to help. Yeah modelling for games is a lot different than modelling for production. I made 2 of the model packs for FPS Creator, and I use 3ds max. For ambient occlusion, all I did was assign the mental ray material called "ambient-reflective occlusion" to my model then use the "render-to-texture" function using the existing UV's of my character to bake out a lightimg map. I'll then blend this with the diffuse map in photoshop.
You can also simply put a skylight in your scene and use render-to-texture with the scanline renderer, although it takes a lot longer this way.
In addition, I also put up two directional lights shining down at an angle of about 45 degrees at my characters from the front and back, and bake yet another lightmap. This gives even more contrast and "pop" to the character, although I blend this one at a low opacity or it starts to look funny.
If you plan on using normal maps then you'll probably just want to use a very subtle ambient occlusion map with very little shading in the diffuse texture.