I need help understanding why shaders when applied to a block (e.g. cube) some of it's sides are black, and some side look different from each other although the same shader is applied.

Also sometimes the shader is applied to the back side of the block although no light sources is near to it. I will provide the sample test project to see exactly what I mean

Here is the link to the test project
http://www.box.net/shared/zg4gtgq7d6

i don't see the difference you speak of, black parts are black because they do not recieve light, other parts are shaded differently because they reviece light from different angles.

I have added an extra source of light in front of the block and for my surprise the back side which was visible with a single source of light is now black (although it should still be lit by the first unmodified source of light) why did this happen

Also the new lit side by the new light source has some dark areas with steep edges (squares) how can I solve this problem and why it happens.

check the level after adding a second source of light.
http://www.box.net/shared/jqtmml7hph

your lights can not reach that sides of the column.



place them on the positions i marked with red.

I have moved the light sources as you mentioned and all the sides were lit, but when i move around the block I can still see dark squares http://www.box.net/shared/18yhfuul0h

To fix this problem I decided to modify the build options and decrease the tesselate shaded value to 33 and the dark squares started to vanish but still visible (smaller squares) is there anyway to get rid of them?
http://www.box.net/shared/y33d8rhyvf

I tried out to increase the tesselate shaded value to 85 and for my sudden the result was better! I though decreasing this value always increases the results
http://www.box.net/shared/gf89rvlaol

so in brief how to completly get rid of these squares despite the viewing angle, and why did at a very low tesselated shaded value the results was not good a bit higher tesselate shaded value.

This is caused by the lightmap using another uvset I think.
If it is, you will have to fix the shader to work with blocks.

Slin I'm not sure I understand what do you mean by "lightmap using another uvset", I didn't change any settings related to the lightmap and I'm only using dynamic lights so there should be no lightmaps at all, if I understand correctly.

I'm assuming that a light map is a different name for what is known in 3dgs as shadow map. what is either an another texture layer containing lumel data or data structure holding a precomputed vertex lighting based on its distance from light source.

concering fixing the shader, I'm using the bundled shader that comes with 3dgs 8.03. I have uploaded the level after adjusting the light as recommened by Quadraxas to http://www.box.net/shared/7caf7l02t1

any ideas

Try to set shademode to flat.

Slin you mentioned "you will have to fix the shader to work with blocks."

why do blocks require a different shader than models, would you please explain this for me?