I have created a Day & Night cycle on a test map. This setup was for a map of a 3D modeler.

The material on the skybox has 1 Sun rotating, a night sky texture and an evolutiv gradient for the day.

 

You can accelerated the time by pushing a keyboard button. If you push it, it will trigger a post process effect.

 

The time is indicated by the clock on the HUD. It's a placeholder created through Flash CS6.