The first dynamic light...the one with a color of 0,0,0 and a range that matches or is close to the range of the static light, is what will effect the shadow of the player model. The reason I make it 0,0,0 is so its light will not "mix" with the static lightmap.

The 2nd light should be a smaller range that doesn't touch any surrounding geometry(if there is any). I usually crank the color so that there is a nice stark highlight on my player as they approach and pass under the light. There's actually going to be a little mixing with the static since there is a falloff area but it won't be noticeable if done right.

The reason I use two lights is simply to get more control. If I were to use a single light that affected both the shadow and the desired highlight, there would be a lot of mixing of the two types of light and it wouldn't look very good.