Contributed by Crazyblender.
I know a better way of making a halo or flare. Insert any model you want. Then delete every vertex except one bij using (b) or (bb). Now you have one vertex left. You can assign a flare or hallow to this vertex by using the material button. Know you won't see rectangles in the halo or flare. You can also assign more vertexes from the same object a flare or halo. This will make great effects.
Good luck!
Contributed by B@rt.
Not really, but you can simulate it. First, make sure your object is a mesh. If not, convert it to a mesh with ALT+C. Next, set the object's material type to 'Halo' (this is a button in the middle row of blue buttons). Each vertex on your object will now render as a spot of light. You can change the size of the halos with the 'HaloSize' slider.
There's a catch though: even though the halos look like normal lights, they do not light the surrounding environment. To make your scene look more realistic you should add a few lamps inside your object. Give them the correct color and parent them to your object so they'll move along when you animate it.