Notice how colored lighting vastly effects the feel of Carni's 'beggars canyon' level from "One Rebel's Sacrifice"
Here is the same shot without colored lights, notice the huge difference.
Colored lighting. It's a great feature in any MoTS level, if it is used right. Reviewers constantly complain about poor colored lighting. It's over used, it's under used, it isn't used…etc. How can you defend yourself from these onslaughts? Well, to start, you need to recognize a balance between colored lights and non-colored lights. That's right, you can't have a level with only colored lights.
If you have never really tried any colored lights before, test them out. Get used to the variety of colors available, and try them with different textures and lighting conditions. Once you are familiar with them, now you have the tools for building great atmosphere in your level. Before adding any sort of colored lights, I like to look at pictures in magazines of sunsets and other natural colored lighting conditions.
There are many different places in which colored lights are practical. The red glow of a control room, the pale orange light of a setting sun, and the blue glow of the depths of a pool or lake. Always have some sort of thing that creates the colored lights, unless a whole room is glowing with a certain color.
For example, let's say you have a small room with a table and some chairs. Very plain. Adding a light object of your choice above the table, and then adding a colored light can spice it up. I would choose a greenish tint, or a yellow or orange, depending on the mood you wish to set in this room. Darker colors, such as blues and greens, tend to set a dismal feel in your level, where reds and yellows and oranges tend to make a warmer feel. It's up to you what sort of mood you want the player to feel in your level.
Now, the dos and don'ts of colored lights. One should never, ever use just colored lights in any level. They are only for supplementing regular white light. It absolutely ruins a level if the player is constantly bombarded with vastly different colors every room they walk into. One should also never add colored lights in one practical area, and then neglect them in another. If you add them to one place in a level, you should add them to other places.
Lastly, remember that there are other things that set the mood in your level. Colored lights are great, but if you focus on them and neglect sound, textures, and other things that effect the feel of your level, then any attempt at atmosphere may be lost. A cave with a pool reflecting bluish light onto the ceiling is still not a cave without dripping sounds, and rocky walls and perhaps a stalactite here and there.