Heres a Dynamic Lighting Pack with 6 different fixtures. Ive got 4 screen shots taken, one of the Dynamic Light Pack in Hammer, and In game, as well as one of Normal Lights in Hammer and In game. Clearly you can see the difference :) This is very basic, and for anyone who only knows about the normal 'light' entity, heres something you can use instead, to give a much more realistic feel to your map!
Functionality: Yes, you are correct they light things.
Architecture: You correctly put the bulb in the socket.
Economy: Does not require any cpu usage, BECAUSE NOT DYNAMIC LIGHTS! So I have place a misleading 10 here, thanks Xero!!