I have just installed LH and the have been fighting to get the lighting correct since. I can currently on see the highlights in the terrain and units, shadows seem to be opaque instead of translucent. This is a step up from the default settings with Stylized Lighting turned on. With Stylized Lighting turned on, all I see is a blank expanse of off-white cloud and the models disappear.
I have an Radeon HD 6950 and updated Catalyst to 13.12, driver version is 13.251-131206a-166389C-ATI. I am running Windows 7 x64. It was downloaded from Steam and should be on the latest stable patch.
I have done some searching of the forums and did not see my exact problem. I have tried turning on and off the full screen option, I have played around with the brightness, contrast, and ambient lighting, I have changed the screen resolution, I have changed all my video card settings to 'controlled by application', and did a full reinstall. I am able to play the previous game, Elemental - Fallen Enchantress without issue.
With Stylized Lighting:
https://docs.google.com/file/d/0BwcmETLUghZ7TVN1MFlGa1FIejA/edit
Without Stylized Lighting:
https://docs.google.com/file/d/0BwcmETLUghZ7VHdZRUlVV3hyTkk/edit