According to this '16 bit dithering' has been fixed in glide wrapper since 2010 or so (.93).
http://www.zeus-software.com/forum/viewtopic.php?f=9&t=52 My own tests, I see 16-bit dithering is actually worse in Directx Mode for example around the lamps (see attachment).
The image on the left is Directx, and the image in middle is 3DFX (NGlide), and the right is Directx 32bit.
While I certainly see a certain level of banding in both, the banding is worse in DirectX 16-bit mode (to the point of seeing noticeable dark outline in the outer edges of the glow, where as the 3DFx gradient smudges out the transparency a bit better)
32 bit still has banding, but there are quite a few more steps in the artwork. It looks like a different set of textures being used actually, rather than simply color issue (32bit is using higher definition textures, and not simply forcing 16bit graphics through 32bit mode).
As for the lighting, between Glide and Directx its subtle. Glide when it works has more light areas and more shadows. More use of 'colored lighting' effects. Whereas directx tends to keep the light more or less the same level each room.
For example while both have halos around the lamps, glide actually extends an actual glow around the wall (better way to explain this is its brigher on the wall near the lamp, and darker the further one gets away from the lamp, see attachment above Clive.jpg). Whereas, Directx has more or less the same level of light across the entire wall (and is overall darker, see above attachment clive3.jpg)..
I think the real trick would be to somehow mix the best of both methods. Somehow make use of the 32bit textures, and also activate any glide only bells and whistles.
It might take making a special driver set like was done for Deus Ex?