Maybe start with chapter 38: http://downloads.gamedev.net/pdf/gpbb/gpbb38.pdf
Mine did Bresenham's algorithm for pixel fill rather than the winding approach used here.
http://stackoverflow.com/questions/495021/why-can-templates-...
Some popular shortcuts include:
- Cut at n hops (with n=4 or n=8 popular choices), defaulting to "ambient" light after that
- Give each material an "ambient" color, so that you don't actually need to trace every pixel back into every light source (just into e.g. spotlights)
- Solve a radiosity equation for the surface colors, and trace rays for textures/reflections.
Complete ray tracing is, indeed, insane - in fact, to get high quality pictures and avoid aliasing, most ray tracers send multiple rays through every picture and average the result.