I actually just edited the post, but there are jaggies. I scaled what I needed to 0.5 and it is basically the best I can get it. I'm currently playing with your sphere of light idea(I'm doing so this very instant), so hopefully I can eliminate them completely with practice.

The really bright spots kind of look like someone spilled some white paint on the ground/wall and smudged it around with their foot. I suppose I can call that my painterly style, now. There's a small amount of jagginess around the paint looking part, but I can live with it. If Conitec implements the ability for us to directly fiddle with lightmaps, I'm hoping I can work some magic there.

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which method do you use now for lighting? is it all dynamic?

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Most of what you see is regular shaded lightmaps...the dynamic lights are what give it that "glow" or faked radiosity. It actually looks really nice during gameplay. If the player walks by a window, they will be shaded by the external lightsources...the way I have the materials set up keeps the model from lighting up completely. All it is is tweaking the model ambient and diffuse settings.

There aren't any flat surfaces shown. I basically was able to apply what I've learned with my original shaded version.