I'm not a normal mapping guy (thus near 0 experience) but you will need to use
float4 vecLightPos[8];
float4 vecLightColor[8];
and then iterate over the nearby lights and do all (?) light calculations in the pixel shader.

I assume the problem with pp_add and your blur effect is that the hdr effect consists of several stages varying in size, and I guess what you see is the size of the smallest "stage"/ its bmap. Sadly I don't know how to fix that because I'm not too familiar with said pre-made stuff, maybe you should post this question in Ask the Developers.