It's intended to restrict visibility some, like blowing sand (except that it's blowing heat waves), so it's doing pretty much what it's intended to do. We wouldn't normally go with an effect that restricts visibility in quite this sort of manner, but this is one of the most hostile environments, and it's meant to be one of many things there to put players a bit more off-balance than normal.
Mmmm I'm fine with things obstructing visibility if that's intended, eg the dark or the trees. I just don't think it's so pretty when it's that bright (although I like the effect in principal). The way the glow bleeds into the other objects is cool, just a little too much for me atm. . . But it's a minor point and others might disagree, so I'm not going to go on about it
With the lighting. . . Well if there's nothing you can do there's nothing you can do. I think the moving spells look kinda cool and stylized, but stationery light sources are going to look pretty horrid aliased like that, I wont lie, especially when the rest of the game is starting to look so stylish and pretty.
If (if) it's CPU intensive but not a ridiculous amount of work, couldn't you AA the edges of stationery sources, just so they don't have the jagged pixelated edges? This could then be optional, as people who turn the option off wont be able to see any more or less, they just wont have smooth edges to their light radii. I'll hush now as I know much too little about programming or graphics to make sensible suggestions beyond this!!
Edit: Just noticed something else. On the AVWW page on the main site, I believe the tree graphics posted down the side are the old versions with the white pixels at the edges. Not a big deal but as the game gets more exposure it's probably an idea to change them for the newer ones and/or some more interesting stuff like cars or enemies
