ullillia & Gorthaur
It's true models are not influenced by static level light, that leaves the lighting set by the model itself through properties in the MED and WED (ambient, albedo etc,), model action lighting, and shaders.
However, Dynamic lights could also be used successfully in an "all model" level. First of all, the Sun would be the common way to light the level, but the other seven additional dynamic lights can also be used if the appropiate d3d_pointlightfalloff (or d3d_spotlightfalloff) vector is set. The default for that vector is 1.5, 0, 0, which gives a rather abrupt falloff at the range of the dynamic light. I have found that one setting that gives a very suddle falloff over a long distance is: 0, 0, 0.4. With this setting, dynamic lights successfully light large areas of the level (more than 6000 even tough the manual puts the limit to 2000).
Well, so far so good, but there are drawbacks. Dynamic lighting is video memory hungry. Using many dynamic lights or lighting a large area of the level, or having a complex level with many entities may decrease the fps notably. That's something too keep in mind and pay attention to. Also, the d3d_pointlightfalloff vector setting is for all dynamic lights at the same time. Fortunately, it can be reset during runtime.
hope this helps a bit
cheers,
tindust