So here's the problem I have with it right now... first of all, the results aren't all that great, a problem inherent in the method. Since the idea is based on rendering the scene from another angle onto a texture, you have a limited amount of resolution. And it shows. Quite poorly.

Jaggies along the edges... gross >.<
Right now, the depth buffer is at 1280x800, same resolution as the screen, and it still fudges that poorly..? Granted, this is the worst case for this particular shot. Unfortunately, it happens often enough to be something to worry about, since even blurring won't fix some of these issues.
The other issue that I have is that the light comes from a single directional light. I could possibly fix it by switching to an orthographic projection for the depth buffer render, but then, I can imagine running into far more issues with the jaggies, and low resolution. Plus, even then, it's still not flexible enough to support an area light or anything like that... a torch for example.

As you can see, the light is definitely coming from a single point
So, I think a different method is called for :/... I'll leave it be for now. More important things to attend to!