We abstracted the engine away from the network code. The philosophy was that network code was always highly specific to the details of the gameplay. I think we were only half-correct. The right answer is to have an architecture where objects on the client and server are well-defined and easy to control. Yes, there is no seam between indoors and outdoors.
Actors are seamless but lights are specific to geometry.
Indoor lights do not affect outdoor terrain. Yes, it's entirely possible to layer one height map over another. Jet3D doesn't do this but an enterprising programmer could add it. I could put it there or on a web page of its own. Jim, that's correct.