Specular Bloom (also called Diffuse Glow, Bloom, Glow, Ghosts, Flare, Glares) is what we call it when the bright objects in your scene glow. This happens in real photography for a number of different reasons, bright areas can be so bright that the actual emulsion of the film bleeds, bright objects can cause internal reflections inside your camera lens causing lens artifacts from glow to lens flares, the photographer has placed a special "soft filter" over the lens, the photographer has placed vaseline on his lens to give their photo that "soft" look. Simulating this effect in cg is actually pretty straight forward, and helps remove some of that "cg" look from your images.

For example, here's a real photo of my floor lamp (exposure set to 1/125 of a second), notice how the glow from the lamp seemed to creep over the edge of the black bowl.

If I were to make a cg lamp, it wouldn't be enough to just model, texture and place a light source coming from inside the lamp, you'd also want to simulate this glow to make it look more realistic.

Here's a number of methods for achieving this effect in a number of different pieces of software. The underlying process is identical, take your image, select the brightest pixels only, blur them, and then add them back to the original image.

3dsMAX

To achieve a Specular Boom using just 3dstudio max, use the blur render effect filter. But wait, we want to glow, not blur, right? The secret is changing to the Pixel Selections tab, and instead of blurring the whole image, blur off of luminance. Min and max control which pixel brightness values get the glow. Feather radius is how soft or focused the glow will be (along with pixel radius that's on the first tab), Blend is how much the effect is visible (values of 15-50% are more common), and brighten is what turns your blur into a glow. Start with a value of 100%, and then work your way up or down slowly depending on the requirements of the image.

Here's the original image without any diffuse glow...

And here's after the glow...

If you're planning on making an animation instead of a still image, a compositing program may be the ticket since Photoshop is not really designed to operate on a sequence of images (although feel free to experiment with the actions feature inside photoshop). You can use a compositor such as Digital Fusion to make your glow, and the process really isn't all that different from photoshop. However, don't use the vanilla glow filter supplied in Digital Fusion, that glows everything (including the darker parts of your image) which will turn your image into a blurry mess if you're not careful. Instead, the best way to do a glow that occurs only on the hottest parts of your image is to pipe your image into a brightness/contrast, using the high and low clip to clip out all the darker parts of your image, then apply a Gaussian Blur filter to the image (or use a Defocus filter instead of the Gaussian Blur to get a Bokeh type effect), then reapply the image using a merge to your original image, making sure it's of an additive type.

You can also experiment with the new soft glow filter in fusion, which will only glow values over a certain threshold. Both techniques are almost identical, it's up to you which you prefer.

How much to glow (brightness and size) is up to you. For a very soft, angelic feel, a slight glow but a big size may be more appropriate. Or if you're matching a cg element into a real photograph, take a look for visual cues in the photo. How much glow appears in the bright parts of the photo? Then try and match those on your cg object, to help it blend with the photo seamlessly. Good reference material is going to be your bible here, and will help you get the look you want.