Did I say that only an FPS can have decent lighting? No, I said that this is TES and not Call of Duty. Why? Because this isn't meant to be flashy. It's meant to be a big open world, so the focus obviously isn't on the graphics, it's on the content.

Lol.
TES has always been trying to reach great graphics for their games. Morrowind was ground-breaking for its time.
Oblivion was pretty ground-breaking as well. A quite big focus has always been to give us freedom in an open world, but also to make the world more believable and stunning in my opinion.
Also, Todd stated that he wished that the "graphical-WOW"-feeling would return for Skyrim, like it did with Oblivion.

I think you've forgotten how great Oblivion looked for its time when it came out. But I can't blame you, it has been 5 years.

To have decently done lighting for an RPG or an FPS, no matter what the category is, doesn't matter. Lighting can be good for any kind of game.
And in that screenshot, the lighting is really bad. Mainly because there is this huge, ugly, saturated, unrealistic bloom on certain areas. Seems to me like wrong HDR settings or badly written HDR code.
To me, lighting is really important. Lighting is what makes a big part of a games graphics I think. It can change a game from looking like a cartoony or washed game, to a realistic beauty.

I have to agree with that. For me, graphics are not the more important thing (Gameplay>Story>Graphics, Music), but if we're talking about graphics... lighting is among the most important things. There are some games that make it greatly (for example, Killzone 2, and yes, I know that it's a linear FPS, but I would like to see something close to the lighting there... not being a priority or a dealbreaker, of course).

In Oblivion lighting was... well, not too good. Even with the shadows quality at the top, they were far from good.

I'm surprised no one has yet to say Spears.

No useless clutter.

Or crossbows.

Must have crossbows.

My second wish would have to be increased realism in battle, which I hope Bethesda already has this covered. Still I'll rant. One of the things I didn't like about Oblivion was that you could hit somebody right in the head with an axe and nothing would happen. The opponent would keep fighting like you love tapped em' even if he staggered. I think that if you hit an opponents body hard enough in a certain place that they should be affected by that wound for the entire fight and that body part becomes a weakness that can be exploited. I also think that hitting someone while they are staggered should automaticly be a critical or outright killing blow. This would work well with the 'two hands' approach being used for Skyrim because you could punch somebody in the face, stagger him and immediatly hit him with the sword in your other hand and take them out with a kick ass animation, of course Hand to Hand and Blade skills would have to be up pretty high to take somebody out that easy.

The same can be said for destruction magic used in conjunction with weapons. If you set somebody on fire with a flamethrower spell not only should they stagger they should run around screaming because they are on fire (not charge at you to trying to hit you like in Oblivion), leaving you a perfect opening to take them out. Same with lightning. Electricity causes spasms so if hit with a strong enough lightning spell an enemy should actually fall to the ground or something. Or frost, the magazine mentioned ice spikes and thats better than what we had in Oblivion but it would be cool to freeze someone with an ice beam and shatter them with a weapon or shield. Another element of battle that is not taken into account is bleeding. If an attack gets through armor bleeding should take effect along with the drop in health and drain fatigue at varying rates so if an enemy has lots of cuts but his health is still pretty high it won't matter because he should colapse to his knees sooner or later, giving you the oportunity to do an execution animation (That would be cool). Hand to Hand combat could be really good now that Bethesdas using the two hands approach. Punches drain fatigue as well as cause damage so it would be good if you could hold both hand to hand buttons to grab an enemy and depending on which directional button is held a different move could be performed ie. throw to the ground, headlock, break neck.

I think it would be really gritty and brutal if after you throw an oponent down you could press the grab button again to get on top of them and punch them into unconciousness. Grabs could be limited by fatigue so that if an enemies fatigue is high you can't do a grab so you have to wear them down first. It would also be great if there were weapons built for hand to hand which would bring brand new animations for finishers and grappling moves and this way the weapons designed for hand to hand could be enchanted so that every hit looks really cool and does lots of damage (Imagine a lightning enchanted guantlet that allows you to actually shove your arm through an enemies chest as a finisher or grab). Hand to Hand can be so much better than it is, imagine a character whos primary weapons are a bladed claw guantlet and a long sword. That character could destroy his enemies by utterly wiping out their fatigue bar with the guantlet, knocking down their health with a sword and closing in for a finisher by grabbing them by the throat, lifting them off their feet and putting the sword into their gut, that sounds like a brilliant combination of hand to hand and blades. Shields could also work this way as well, if you press the button your shield is assigned to you can use it as a weapon with variations with the d pad button and if you hold it will be used to defend from attacks(Something far fetched but still awesome is the possibility to actually throw your shield like Captain America by holding shield button and up on d pad or something) I think its so great you guys are using two hands approach, you guys have so much potential it's not even funny.

Throwing knives isn't a big deal but it would still be cool, no, actually it would be cool if you could have the option to throw everything including swords. Back to throwing knives it just seems good for a sneak specialist especially if poisen is used and you can throw like four at a time, it would really give that archetype some of that power it is missing as well as improved mobility. Which brings me to defense and dodging. I think if your agility is high enough and you hold the joy stick in a direction to avoid an attack then we should side step or roll. As for defense I think it would really inspire a gritty feeling if two enemies could lock swords in a test of strentgh and endurance. Fatigue would constantly be drained and who ever runs out first loses the test and suffer a critical blow and strentgh determines how fast an enemies fatigue depletes. This could work awesome with a bladed guantley because while swords are locked you could take the advantage strike, dishing out your critical blow early. Another test like this would be one where both combatants strike fast and hard at each others swords causing sparks and some really intense motions. One last thing I'd like to cover about combat is enchanted arms. I think that enchanted arms should be more powerful, to actually make the player feel unstoppable with the particular weapon. Maybe that weapon has unique animations, maybe it has unique enchantments, maybe it actually talks to you and tells you if enemies or dragons are nearby, maybe you can shove it into the ground and blow up everything around you with an explosion of blue fire. Stuff like that. Once again Bethesda thanks for making games that have become a part of my life. Everything I say is with the hope that I can actually improve or contribute to this great series. I understand that this is not some suggestions board and what we say will not make the team drop everything they have been working on to comply to our wishes. Still its either shut the hell up or at least try to put some good ideas out there. I'd rather put some good ideas out there, no matter how small a chance there is of them being picked up. Thanks.