The Light is a place where spirits cross over and it is described as very beautiful by all of Melinda's spirits that have crossed over.  It is filled with love and forgiveness not judgement.  Dark spirits, like Romano, convince souls to join him by filling their heads with false promses and saying that in the Light there is judgement.  Friends and family are waiting for them on the other side.  Spirits are unable to cross over if they feel they don't deserve it, or feel a negative emotion like shame or despair.  The ghosts of children that have crossed over become "Shinies"  and sometimes when a spirit goes into the Light sometimes only part(s) of it does and the other part(s) are left behind and become "Shadows".  The children who have been touched by the Light which means that they died and came back get psychic abilities. When a very large group of spirits are crossing over the Light, the living can see the Light like in the episode "The One".