Light symbolizes knowledge, and darkness, ignorance. The Lord is the "Knowledge Principle" (chaitanya) who is the source, the enlivener and the illuminator of all knowledge. Hence light is worshiped as the Lord himself.
Knowledge removes ignorance just as light removes darkness. Also knowledge is a lasting inner wealth by which all outer achievement can be accomplished. Hence we light the lamp to bow down to knowledge as the greatest of all forms of wealth
Why not light a bulb or tube light? That too would remove darkness. But the traditional oil lamp has a further spiritual significance. The oil or ghee in the lamp symbolizes our vaasanas or negative tendencies and the wick, the ego. When lit by spiritual knowledge, the vaasanas get slowly exhausted and the ego too finally perishes. The flame of a lamp always burns upwards. Similarly we should acquire such knowledge as to take us towards higher ideals.
Whilst lighting the lamp we thus pray:
Deepajyothi parabrahma
Deepa sarva tamopahaha
Deepena saadhyate saram
Sandhyaa deepo namostute
I prostrate to the dawn/dusk lamp; whose light is the Knowledge Principle (the Supreme Lord), which removes the darkness of ignorance and by which all can be achieved in life.
