Blender 2.5 How to Remove Dark Blocks of Shadows

In the Blender 2.49b version you can have a scene composed of one lamp light and an object and you wont have a problem producing this kind of image.

Notice the transition from light to soft shadows.

However, in the current Blender 2.5 version you will get this...

We get large blocks of ugly dark shadows.

How are we going to solve this problem? How do we make it as nice as the old Blender 2.49b render?

1. Click on the World button.

2. Click on Environment Lighting
3. Play with the Energy setting until you get the desired result.