Sorry to bring up such an old thread. But I have some similar quips about Toon Shading in general.

I agree with most of what has been said above. However, we have a very strong night scene in a town that's shadowed in tree's. And I really wanted the effect of the main character passing the lanterns on the road...

However, I don't think 8 dynamic lights would be enough, so I'd have to do some sort of static branch with pixel shader 2.0 or such. Think this is a good idea?

Also, there's no BSP geometry in the scene, it's a height map and meshes added in. Thoughts would be appreciated!