12:21 a.m. on November 23, 2006 (EST)
Steve,
I have several candle lanterns. Well, a couple are period-correct for the Mountain Man fur-trade era, since Barb and I do re-enactments. But I have a couple that are similar to the one you mention. Couple of caveats - all the tent manufacturers make the statement that you should never have any flames in your tent (that's actually a required-by-law statement to satisfy the fire safety laws in most states). The reality is that there is a real fire danger with a flame in a tent, especially synthetic tents. They will melt and drip really hot stuff that will stick to the flesh and burn you (I've gotten a few scars that way from fusing the ends of nylon cords and ropes), and may in fact actually start burning with a fierce flame. But if you are careful and keep the lantern hanging in a stable location, well away from the tent walls, you are probably ok.
Of course, I will add my standard disclaimer - never do anything that is not approved in writing by the manufacturer.
Two other dangers to be aware of - anything that burns - stove, candle, whatever - consumes oxygen, meaning there is a danger of exhausting the oxygen in your tent, which you need to breathe. Also, the yellow flame of a candle means incomplete combustion, hence carbon monoxide, as well as carbon dioxide. CO is poisonous and can kill. As a practical matter, if you vent the tent, there won't be a significant buildup.
All that said, there is nothing quite so pleasant in a tent (or even better, in a snow shelter) than the warm and friendly light of a candle. A candle doesn't produce enough warmth to heat your tent, but that yellow flame gives a warm feeling. Your eyes can adjust well enough to read by, too.
You do have to do a certain amount of maintenance of the lantern (and wick of the candle) to keep it operating most efficiently, and you do need to be aware that all candle lanterns will drip wax under some circumstances (probably won't melt the nylon of your sleeping bag, though, but it's a mess to get off).
Citronella? - works fine for keeping mosquitoes, no-see-ums, and other flying insects away, and seems to work on other exoskeletal beasts away, too (spiders, ticks, etc). I don't know of anything it attracts. I haven't heard of it attracting bears, skunks, raccoons, or other furry fellows, though I could have just missed that. But, if you are in your tent with the mesh zipped closed, you won't be getting the insects and their kin anyway.
While we are on flaming things, I strongly suggest you do not attempt to use stoves and lanterns of the liquid or compressed gas variety in your tent. at least not until you get very very familiar with the quirks of the flaming device. The fire, O2 depletion, and CO and CO2 buildup dangers are very real. I have seen tents disappear in very short order due to carelessness and inexperience with flaming devices. It even happens with very experienced people (like the Wilcox expedition on McKinley, who had a tent vanish in less than 10 seconds, along with a sleeping bag and a couple of down parkas).