Its a plugin that will place a torch on the block you are standing on. After it comes out i will probably add stuff like making glass become wool for the moment so the torch can apear. This allows portable light even though lighting is client side. Created for my Tekkit server RWtekkit.vortexservers.com:8051
You should modify the MC glass so that a torch can appear on it normally, or have a dependency against a plugin that does this already (for example, BlocksOnGlass and my plugin CrimsonStone). Aside from that, nice idea!
This plugin now exists and was changed to work better to your ideas http://dev.bukkit.org/server-mods/rwtc/
You don't need to turn glass into wool to be able to place it there... since you're placing it forcefully. What you need to worry about is physics events which will make the torch pop, see the how the suggested plugins Icyene suggested handle the physics
