add a simple 2d plane and make it have a gradient alpha, will look much better and give you control of how it looks.

The question for me is: what is the effect you are going for?

Should this be an eerie, faceless character that looks scary? Shadow his face, Imperator style.

Should it be a cheery player character, evoking a positive emotional response from the player? Maybe go easy on the shadows and make sure the player can still see the face.

Faceless character = evil, badass, scary (Think the Imperator or Judge Dredd... it can also be used for a "good guy", as long as its a badass good guy)

I personally prefer the update with the Ambient Occlusion added, best of both worlds ;-)

Well to each their own, but it pains me to see such.