Building The Scene
We will start this tutorial by building a simple scene consisting of four objects - a UV sphere, a lamp, a camera, and a floor plane. Place the objects in roughly the same positions as the diagram below.

Fiddle with the camera a little until you can render a sphere resembling the one below. Our scene is now ready. Define the shader of our sphere and adjust the world settings so that the .hdr image is mapped onto the surface.

Creating the UV Sphere Shader
Select the UV sphere. Go to the editing tab and click on the set smooth button - This will automatically smooth out our UV sphere when it is rendered. Now click on the shading tab and press the add new material button. We want to eliminate the material's specularity, so adjust the spec slider to 0.  Click on the mirror transparency button and then the ray mirror button.  Set the corresponding slider to a value around 0.50.

Our material preview should show a texture reflecting a chequered floor plane. We have now finished creating a material for our sphere. If we render our image, we can see it is reflecting a blue colour, which is our current sky colour.

Loading a .hdr image Into World Settings
Deselect all objects and click on the shading tab, and then the world settings tab. From the bottom right of the screen find the add new texture button and click it. We can now load our .hdr file. To do this, click on the texture tab, and set the property in the texture type box to Image. Navigate your way through your pc¡¯s hard drive, until you find your hdr file and then load it up. Leave all the other settings alone.

Soft shadows
To give our scene more life-like lighting we are going to enable soft shadows. Start by selecting your lamp, then click on the shading tab. Now click on the lamp button and then on the buffer shadows button. Play with the settings to your heart's content until they suit your own individual tastes. You can also adjust the strength of the light in the shader tab.

Final touches
If you are unsatisfied with the results that you receive from your renders, just start moving the light source into a position that you find more aesthetically pleasing. I also find that if I decrease the amount of diffusion on my UV sphere, the specularity reduces accordingly as well.

Rendering
Go to the render tab. Make sure that you have YafRay enabled as the render engine, and that the envmap setting is enabled. Then just hit the render button. The result should resemble the image below.

This is, of course, only a single example of the potential uses of HDRI mapping. You could use this feature on any model that you have created, and the technique is universally exciting, capable of making all your models substantially more life-like. So play around a bit and watch your renders come to life!