4. Adjust the brightness of every single object you render, by modifying the material settings. Tricky to get this looking right, and not good for performance.
this is basically the approach i'm taking.
but unlike the traditional directx way of doing things, i keep meshes, textures, and materials separate and interchangeable. so i only use a d3dxmesh as a convenient way to store a vertex and index buffer, and don't store any texture or material info in the mesh. therefore, i have a global array of materials used for everything. the game uses 7 different materials at the moment. there's a routine that sets all the materials to their default values (normal brightness). when the user changes the brightness level, i simply reset the materials to default, then multiply their values by the new brightness level. the game then runs as usual, until the brightness is changed again. so i never have to do anything ugly like change the material in a d3dxmesh before i draw it, then change it back, every time i draw it. i just scale the material values once when the player changes brightness, and i'm done. one of the plusses of this method is no additional lights required. i had experimented with additional diffuse lighting, even at out of bounds high levels, with no success. this led to the conclusion that what was required was not more light, but brighter objects.
the effect is not bad, scaling should not be linear though, changes are too coarse at first, and too fine near the end. looks like specular should not be increased, or not as much. but now i know how Oblivion gets all those nice looking unrealistically shiny rocks. too much specular seems to enhance texture depth, almost like bump mapping. looks cool. unrealistic, but cool.