John Carpenters the "The Thing", and a few other movies

How do they get that effect when they are walking in darkness with a light.

It flares out like a blue light and thins out to a wide horizontal line/beam.

Sort of a lens flare type effect.

That is one of the effects of using an anamorphic lens. For 35mm, anamorphic lenses compress the image horizontally in an approximate 2:1 ratio which ultimately, when unsqueezed for projection, creates a 2.35:1 image. Certain optical characteristics occur by using these lenses, one of which is the tendency for highlights to flare sideways as you have noticed. Another is that round highlights that go out of focus in the background tend to become oval in shape. This is noticeable in such films as "Close Encounters of the Third Kind", for instance. Another visual characteristics of anamorphic is shallow depth of field (half that of 35mm, meaning something like 1/15th that of DV!!)

I'm not aware if the horizontal flare is apparent when using an anamorphic adaptor for DV, but since the squeezing is much less pronounced (4:3 to 16:9) than on 35mm, I don't know if this would result. I have a friend who had a two-point star filter made, which created a similar result in that flares would stretch out sideways.

I -think- I know the effect to which you refer. This can best be achieved in post-production with several products, the most notable of which is the Knoll Light Factory. This is a plug-in suite for After Effects, Final Cut Pro and Commotion.

The LA Final Cut Pro Users group has a page on it here (http://www.lafcpug.org/review_knoll_light_factory.html).

p.s. Charles' explanation, as a practical effect, is also right-on!