Poly refers to polygon lighting effects. A PolyLight isn’t a true light in the OpenGL sense; it simply changes the color scale on all objects within a certain distance of the PolyLight object, so that objects that come closer to it appear to grow brighter, and objects that are farther away appear to grow darker.
It’s similar in principle to a PointLight, but it brightens and dims the entire object, not just the side of it that faces the light. It’s most appropriate when you have low-polygon models whose vertices would become obvious in the presence of true vertex lighting.
David