Reality Factory

I replaced the lights with spotlights of arc 360 degrees,and they were the same with the standard lights.
Anyway-for the moment i wont use normal mapping-
the pawns flicker dark and bright as they they approach varius lights(they have no fallof as you have said) .

Have you tried the normal map plugin by Nvidia for
Paint shop pro? There's also one for Gimp, a tut on my page
somewhere
http://terrymorgan.net/download.htm demo071 or 72.

I will try melody,because the procedure i used for making the normal maps with modeling quad patches creates seams.

Painting heightmaps is easier for me.

The normal mapped actors must reveive light from all nearby lights,with color and falloff.
The default lightning could then be removed.