I forgot to mention that I am using an HMP generated by IceX2, and if I am not mistaken it uses the multitexturing shader. As it is right now, the terrain is affected by the sun and the ambient light.

I tried placing dynamic lights next to a wall that I have in the level, and I can see that the light is illuminating the wall but the terrain below it remains uninfluenced by it.

I suppose I'll try it on another PC as soon as I get the chance, but I'd really like to get it working on my development pc's. I'm not sure if this makes a difference, but my primary PC is using an ATI Radeon 9600 Pro. I know the card is older, but it should be more than adequate for this situation.

Thanks alot for your help guys,