I would encourage you all to take a quick look at the Ethanon engine to get some ideas about how cool it would be to have a dynamic lighting system in C2. Being able to use multiple light sources, with a variable radius, normal, spec, and illumination maps would be quite amazing.
Certainly it would place additional demands on the engine and if you chose to use dynamic lighting you would need account for this in your game design.
The current implementations that I have seen for c2 in the form of plugins, while inspiring, really don't allow for multiple light sources on multiple objects - at least as far as I could figure out.
Somewhat off-topic but I think the particle effects plugin in C2 could really benefit from some additional features (trails, start and end color, jitter, etc).