AO is Ambient Occlusion. it makes shadows look more real and increases render time! it's generally not wanted on the scene preview. Ok.. I opened P11 with Andy Front and Center and confirmed my Preview render settings are the same as yours.... When I grab a light and swing it around the scene, the shadow for that light moves. I have 3 or 4 shadows in the scene, all displaying on the ground plane. Here's a screen shot of my settings.... and part of Andy's shadows...

While I'm sending screen shots... this option is checked for the lights, right??

I'm mystified!!

;>

Andy!