Can anyone describe how a light which the player carries around with him is made with the Elder Scrolls construction set please?

Load Morrowind.esm in the CS. From the menu's select Edit and Find. Type in torch and click OK. It will load a cell in the render window with a torch selected. Double click the torch to open the properties window. It is divided in two halves. The bottom half is the reference data for items placed in the world. Ignore it. The top half is the object data and this contains everything you need to know.

Thanks! I will see what I can do.

There's also a little box in that same window that says "this light can be carried" or something along those lines. Click that and it becomes an item, not just decoration.