Alright I have the latest drivers 295.73, using a gtx 580. Ambient occlusion set to on in the control panel and nvidia inspector.

I don't see any difference at all? The first time I turned it on a couple weeks ago it worked and looked great. But I guess I changed something and cannot figure out what it was.

Anybody else having this problem?

Fixed my problem. Had to disable stereoscopic 3D