I usually keep 1 and 5 the same for the shadow influencer and set 2-4 to 0. It emits no light; thus you won't see the light extinguish.

That's the most tricky part of turning non-0 lights off and on. It just doesn't look good if the player can see the light go off. That's why you have to make sure to keep it on long enough for them not to. It gets tricky and frustrating sometimes....esp with traditional 1st person and 3rd person chase cams. I can hide it better with fixed cams, but I have a tendency to want to show the player way off in the distance, and I run into problems, sometimes.

Stencil shadows are somewhat limited right now, so you'll have lots of shadows just appear out of nowhere and disappear just the same. I made a lot of suggestions a few weeks ago, and now that DX9 is in, hopefully that will get upgraded sometime during the next couple of updates.