This is my latest mod. It allows you to kill placed torches by right-clicking on them. Then, you can right click on killed torches, and that will relight them.
This mod should work with ModLoader, but I'm not entirely sure as ModLoader does sometimes give unprecedented results. The block ID for the dead torch is 120, so any mods that use that block ID is not compatible with this mod.
Version 1.0 - First release for Beta 1.6.6