Cool. So I am still experiencing the same issues but it's a bit clearer now that I removed the scene lights. Here's a sample with 6 rim light scenarios.
Regarding the lightmap issues - have a look at this, especially point 6: http://www.worldofleveldesign.com/categories/udk/udk-lightmaps-01-basics-and-important-principles-for-creating-using-lightmaps.php
I've worked on a map that had about 5-6 people working on it - turned out to be one of the fan favorites (this was a MMO instanced scenario but it's pretty similar to a DM map)
virtualization works alright... until of course you have a job that requires you to make 6 million triangle models using the software you are trying to run virtualized. :)