This technique was pioneered in 1998 by Paul Debevec and Greg Malik. In their SIGGRAPH presentation "Rendering with Natural Light," they demonstrated quite impressively the basic principle by pumping up the Radiance render engine with a lot of custom code. Five years later, in 2003, we asked the questions "How far has IBL trickled down to commercially available software packages? Can it be used in production without writing a single line of code? Is it ready for prime time yet?"
So, let's find out!