Magic candles are useful for the DM. They can provide some useful magical ability to the PCs but can be short lived. As a DM I've gained a reputation for being a tightwad when it comes to parceling out magic items. Handing out too much magic, cheapens the whole idea of it. "Bah! Another enchanted sword, got three already..."
So, a good compromise between a dearth of magic and a glut would be introducing useful, but temporary items such as magical candles.
Here are some I've created, it's really easy to make variations like these...
Cursed Candle of Scuttledrig--This rough, black, waxy candle is made from the carapaces of exotic beetles. When lit, the candle summons a swarm of crawling, biting beetles that will attack the person who lit the candle. They will continue to pursue the target for 6 rounds after the candle has been extinguished. [The beetles are treated as a 4 HD Insect Swarm, see LL p83]
Smudge Stick--This squat, yellow, magic candle sputters and gives off small wisps of acrid smoke when lit. The real effect happens when the candle is blown out and thrown. It creates a billowing cloud of yellow smoke that acts like a stinking cloud spell, except that the smoke fills a 10 square foot area each round for 6 rounds (for a total of 60 square feet cube in 6 rounds). The cloud obscures vision and any entering it must save vs poison or become helpless with nausea until the cloud disperses (after 6 rounds). [I mention that the candle is thrown otherwise the user will suffer the spell effects also.] This candle is usable only once.
Holy Candle of Communion–This holy candle is marked with symbols of a particular deity and is usable not only by clerics but also by magic users. When lit the candle functions as a commune spell allowing the user to ask three “yes” or “no” questions of the deity. Each candle is created for a specific deity and may not always be the user’s deity. The markings will be instantly recognizable to members of that particular faith. If the user is of a different religion than the deity, the GM may roll on the monster reaction table. A result of “unfriendly” or “hostile” will mean the deity sends a summoned monster (GM’s choice). This candle may be lit only once.
Holy Candle of Unity–This candle is usable by all. When lit, this candle will function as a tongues spell, allowing all within a 5′ radius of the candle to speak and understand one another. For reasons unknown, the speakers must whisper. Speaking in normal voices or louder will not allow the magical effect to work. This candle when new has a burning duration of six hours. Each time the candle is lit, a minimum of one hour of usefulness will be deducted from its life.
Silent Taper–This slender candle is usable by all, but favored by thieves. When lit, it acts as a silence spell but with only a 5′ radius. The burning duration of this candle is one hour. It may be used for a shorter duration than this and then re-lit at a later time, but each lighting reduces the candle life by a minimum of 10 minutes.