Thanks for giving it a shot, and for the feedback!
Which effects specifically are deep frying your images and could have better defaults?
The Palettize effect is a bit misleading, since it's more a Posterize effect (similar to Photoshop) which limits color count per color channel. I'll make sure to rename it so it's little less confusing and look for an alternative approach to palettization.
If you need a work around, the ol' school approach is to add "Grayscale" or "Luminance", add a "Palettize" with the color count you want, and then a "Color Tint". If you don't want the lowest color value to be black, add a "Levels" before the Color Tint and increase the "Output Black".
Lighting Settings only apply to effects from the "Generator" category, or the "Normal Map" effect (in Utility). These effects have a "Light Bulb" icon their header that you can toggle on which allows the Lighting Settings to effect the final texture result. The workflow isn't obvious, but I am planning a tutorial to cover how to use it.
Hope that helps, and keep the feedback coming if you've got 'em!