Is it a problem during E3 demoes ? As in did the bright spot obscure the on-screen details ?
Honestly, I don't know. However, I'd have thought that the effects would be minimised by the displays at Expo being set-up similar to how they are in the retail environment, with high brightness and luminescence levels, which partly aid to reduce glare and reflections from those bright environments.
However, most peoples homes aren't so bright and reflections become more of an issue. Well, for me at least
Which is why, if I'm watching a movie or playing a game when there's bright sunlight outside, I close curtains in windows that would cause reflections. And in the evening, lights are lower and certain lights in my living area won't be turned on.
But even if they are on and I'm, say, watching a movie, then the human brain will tend to filter out those reflections quite quickly. My concern is that non-static elements, and especially those that throw off light, are less likely to be filtered out and therefore are certain to become an immersion killer and potentially an annoyance to.
So for the party-type games, where it's all about the group fun, I can't really see it being an issue due to the nature of the titles. Titles like SOCOM or Heavy Rain, where it's about immersion and being in the moment? I'm concerned.
WIth regards to your question about obscuring on-screen details, I would assume that the light thrown off is not going to be that bright (and it's definately not directionally focused as a torch would be), so that wouldn't be a concern for me I don't think. I did search youtube after your question for some E3 vids on Move, but most are either Sony promo vids or E3 vids shot at an angle to the screen which obviously doesn't show the face-on reflections.
However, there is this:
http://www.eurogamer.net/videos/digitalfoundry-playstation-move-latency-analysis?size=hd which kind of shows the annoying reflections of the light baubles.
