Your comparison you posted - everything is more clearly defined in that one. I think the issue with yours is that it seems you are using fog effect with an overlay, at least it seems that way, because everything is blurry. It's not just dark, it's not clearly defined.

In any case I don't think you are getting the effect you want. Darkness is only effective on people because they can't see what is in the dark - fear of the unknown. I can see the whole screen so there is no need to fear the dark. I suggest making the outer layers of the circle overlay *almost* pitch black. That way if something moves in it it is impossible to tell what it was, but obvious that something is lurking in the shadows.

I admit I still have a CRT monitor, but the real 'problem' is that most newer computer's screens are just too bright. Why would they care about that? I, on the other hand, have been working with graphics for a long time and I'm confident when I say something's too dark... But even if you're right, I can still see the character in that screen you posted there. That's the whole point. You should do that. =P

Yes, I think the player's character should be clearly visible at all times, even if you want to obscure its surroundings. Also, I'm sure that once in motion, playing in full screen and with the lights out, everything can be seen better. But that's hardly the point.