This modification makes 'shining' items (default: Torch, Glowstone, Glowdust, Lit Pumpkin, Redstone, Lava Bucket, powered Minecart) illuminate everything around them if
1) the player has them equipped (in hand/armor)
2) they are dropped on the ground
3) another player has them equipped in Multiplayer
On top of that, burning Entities (Creatures, Items) shine light.
You may add any Item ID you wish as shiny item, via the settings file. Also supports armor items!
You may also configure whether an item still shines if in water, and how long it shines once you hold or drop it.
Toggle button ingame:
The key is "L". You can turn all dynamic Lights on/off with it.
Download link:
Download1 or
Download2