Illuminate a Mirrored Room
Python, 292 chars

import sys
R=''
for x in sys.stdin:R+='%-97s\n'%x[:-1].replace(' ','@')
M={'/':'-98/d','\\':'98/d'}
for d in(-98,-1,1,98,99,97,-97,-99):
 if d&gt;98:M={'|':'d^2','-':'-d^2'}
 p=R.find('C')
 while 1:
  p+=d
  if R[p]in' @':R=R[:p]+' '+R[p+1:]
  elif R[p]in M:d=eval(M[R[p]])
  else:break
print R,


Reads in the room, makes it rectangular, then walks out from the candle in all directions.  M contains the active mirror characters and their effect (/\ for the cardinal directions, |- for the others)

Can handle rooms up to 97 characters wide.