You could either:
a) Setup the scene in Direct3D and set the camera position to be a relatively typical isometric view. This would let you use Direct3D's lighting and similar. I've never tried this, but I'm pretty sure others have. The upside is that you get perspective correction, and can use 3D models relatively easily (ie. you can render from lots of angles easily, although you have to control your poly count which is what kept me from going down this road - my pet artist isn't into low poly anything!). The downside is that you pretty much need a full-scale 3D engine to do Diablo-like psuedo 3D.
b) Render the game like you would a regular isometric view, calculate the lighting by hand and use DrawPrimitive to render the tiles with either a lightmap or vertex lighting. This is actually a LOT easier than it sounds, and can give really good frame rates. The downside is that you don't get perspective correction, you have to write enough lighting calculation code to figure out how bright each vertex is (actually not that hard, especially if you can include basic lighting information in the map structure rather than calculating at run time). The upside is... its fast, lets you use a lot of Direct3D effects (including lighting that is substantially smoother than that in Diablo 1).
I am in the process of developing an engine (eventually for an RPG, but it could equally well be for an RTS with the frame rates I'm getting!) that uses option b. Email me (my address is bracket@unforgettable.com) if you want me to send you a sample and some basic code examples. (My target machine is a Pentium-II 233 Mhz with a Voodoo 1 (4 Mb) or better, so anything much less than that may look pretty bad/slow.)
[This message has been edited by Bracket (edited November 10, 1999).]
