Voted for several characters. The Khajiit uses his racial night-eye lesser power when he needs to - no cost, nothing to carry. The archers use a torch because it naturally extinguishes when they grab their bow and close in for a sneak shot, and the melee characters will use a (short-range) light spell when they need both hands for sword and shield, but would like to see whet they're hitting.
I find that night-eye's infinite range is a bit of a limitation. Seeing a distant light or flame gives you a clue to things that gets drowned out by night-eye. So even the Khajiit will use a short-range (weapon reach is about enough) light spell to illuminate what can be touched, while leaving the distance dark, as he wanders around.
I've played around a bit with the Illuminate spell, which lights up your target instead of yourself. Just as good for target-location, and it can be found on arrows, too. It seems that enemies always have night-eye once you're detected, so giving them some light makes no difference to their capabilities.