Interesting, in theory. I have some problems with it, but before I get to that let me attach a proper screenshot; I think the ones offered are rather underwhelming and don't show the effect very well.
EDIT: Adding a second screenshot so you can see a proper 'before' and 'after' comparison.
BEFORE:
AFTER:
I played with this a little bit with both Diablo and Hellfire, and it sadly seems unstable even following genin's suggestion of enabling debug mode in the .ini file. Diablo can crash randomly, though Hellfire did not crash for me yet, both seem to always crash when you quit. The exit crashes are fine, but the random crashes preclude any desire for me to actually play the game with this.
It lets you play in a window (on by default, you can adjust the window resolution or you can change the default to fullscreen in the INI - alternatively if you're playing Diablo simply press ALT+Enter to go fullscreen, but ALT+Enter doesn't work in Hellfire for some reason), which is neat.
From a technical standpoint this is quite impressive, but at present with its default settings, I think it creates some serious contrast issues. Things are both too dark and too bright; you'll probably initially want to increase the game's brightness because of how dark everything is, only then later to find your spell icons harshly bright, among other effects you might see in the play area.
There also seems to be some auto-adjustment going on that makes the glowing effect more or less prominent; moving through the Caves I noticed the light levels flare up and down a bit depending on how much lava was on screen. This makes getting a consistent effect quite difficult. I'm uncertain if this modification is responsible for that behavior, though, as this could be normal for Bloom and/or HDR (I haven't used these in awhile in newer games).
It also causes some minor graphics artifacts in the main menu, but I can overlook those.
If the author can iron out the stability issues and provide better default settings, the mixture of soft glows and deep shadows could certainly be attractive.
Thanks for sharing!