Quote - You can increase the Shadow Blur Radius in the light properties to get a soft edged ray-traced shadow.

I used soft raytraced shadows in this gallery image:

http://www.renderosity.com/mod/gallery/index.php?image_id=1272828

Observe how distant shadows are automatically blurrier than near ones.  This is particularly noticable on the refrigerator door.  For instance, the shadow of Owen's right hand and arm is sharper than the shadow of his head.