ok... first of all, I had to create alpha maps for the eyes, or have Biturn make them for me. (I forget which, but I know I needed them.) After applying the color map info, copy that layer (top left of the surfaces panel) click "use texture". Then click on the Transparancy "T" button, and Replace the Current layer. You should see the color image pop up on the right side where it shows a preview of the image. Change the image to the alphaed version of the image. Make sure that Pixel Blending and Texture Antialiasing are both OFF! (You may need to invert this layer, depending on the alpha image.)
That'll perfectly remove your images' pink border.
Lighting the back: Here's where things get interesting... The vector colors for the back are natually dark. There's no way to avoid this, without recoloring it by hand. However, you can add a light wiht a high intensity. In my quick test, 300% intensity really brought out the colors. (My models use 75% Luminocity, and 50% Diffuse. I find it works best, as you can have the vector colors, and lighting effects.)
As for the baking problem, go back to the vector colors, and when you bake the object, turn off everything but the color information. (Bake Color On, everything else off.) This will bake only the color information, and not the lighting information.
But you should only bake it if you're going to export it from Lightwave. Otherwise, just use the vector colors.