I'm sure the gurus can give you a better explanation but I will try
based on my experience.  More importantly then radiosity settings is the
light source that you are using.  If you are going pure radiosity for an
outdoors scene you will probably want to invest in an HDRI map and use
ML-POV.  If you use a regular sky_sphere you are going to get a very
constant, dull illlumination of the scene.  Of course this is basically the
illumination that you get on a cloudy day, but your image is still going to
render washed out.  If the scene is to dark, try multiplying the colors in
the sky_sphere.  Having the camera point at the sky_sphere will cause the
colors to clip out of range (the sky will look white), but often you need
much brighter values to properly illuminate the scene.
    If you haven't done so already (its hard to judge from the resolution of
that image) add a point light to your scene.  Pure radiosity is realistic
and artistic, but a dim, well place point light can bring out the shadows
and shades.  Radiosity and light sources go good together when the scene is
setup properly.  For example you could use an HDRI map of the sky and place
a point light lined up with the sun where the sun would be.
    As far as your settings are concerned, a few adjustments could be made.
Contrary to what Severi said in his reply, I have found that anything more
then a recursion setting of 3 for a rad scene is overkill.  Unless you have
an interior scene with alot of nooks, crannies, and diffuse lighting, you
probably won't need anything higher then a recursion level of 2.  Your
setting of 1 is probably fine for now, especially if you use a point light.
Not only does raising this number kill your render time but it also washes
out the image.  The extra light bouncing around will dull your shading,
however, you can counter this by raising the assumed_gama.
    Your error_bound is way too low.  If your illumination is pretty broad
or you are using point lights you could probably get away with an
error_bound of 1.0.  I typically don't lower that value further then 0.5
because, not only does the render time go up, but the artifacts are
impossible to get rid of.
    Like Severi said, that ambient light should be 0.  Unless the object is
a light source, it should not have a ambient light or else its going to
interfere the natural illumination of the scene.  You can try raising the
brightness in the rad settings if the scene is too dim.  Hope this helps
some.

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