I see. So I suppose I'm doing nothing wrong then.
Thanks for clarifying why the patch fails to enable them properly wrinklyninja.
And no, having them as red and ticked, is not a problem for this mod Sogar, although I found the batched patch for the filter part, does work, thus just enabled as a circle once complete.
You should also use the All Natural - Real Lights mod to improve the amount of real lights used in dungeons as well as removing fake ones. It is part of the All Natural mod that changes weather (Recommended), but can be installed separately if you so wish.
http://www.tesnexus.com/downloads/file.php?id=18305
I also recommend Dungeon Actors can Have Torches:
http://planetelderscrolls.gamespy.com/View.php?id=2873&view=OblivionMods.Detail
All combined, this makes for very atmospheric dungeon crawls. Enjoy.