My flat textures' res is 16x16(I see no reason to go higher given they're flat), so I don't know if that's it. However, like I said I thought this was an old "bug" in the way lightmaps/shadows were built. Once upon a time, the artifacts were there, then jcl said something about it one day(after I posted a thread) and poof they vanished with the subsequent version. I'll have to try and find that comment, but that may prove difficult given the time involved and how this forum sometimes loses things.

There is one way I can make them go away and that's placing the static light slightly in the street instead of on the sidewalk(like the top right light). Anyway, this was just a global ambient test..that light treatment is awful to begin with, so it's going...this was just a surprise that's all.

@SV: I think he's right about the intersecting. I've always had that happen, too and it's just a matter of tweaking to make it go away...if you even can.