A couple of weeks ago while assisting a customer with finding her way around my product (N30 Deluxe Modeling Studio) we discovered something very strange. I could see the local lighting on myself and not her. She could see the local lighting on me and not on her avi as well. When I got in touch with a Linden via Live Help, I was told that the local lighting was kind of temporarily "broken" that logging out and back in (perhaps a few times) would clear it up until Linden Labs got it fixed.
I have posted a photo of exactly what happened for your information:

Notice that I am beaming with green light and the other person is not while we are both standing directly in front of the lights.
I have personally not had big issues with local lighting, I will have this happen to me on occassion and relogging or teleporting clears it right up. However, I have not seen anything posted about this and I would like for you to address this issue so that we are all on the same page and so I have a reference when instructing my customers who are having trouble with their local lighting.
Is it possible to provide us with a technical explanation of what is causing the local lighting to work on some workstations and not others? I would greatly appreciate your taking the time to respond at your convenience.
Warmest regards,
~Mad