I suppose you mean "character" by "entity." I have tried this before - it has to be dynamic to appear. Apparently, static entities don't get along well with lights, especially more complex ones like characters. Just give it the default.fpi script and 0 health and it should be fine. As for the hovering, press Enter when you have it over the floor or table or whatever you want it on and it will find the top of it. If you want it on a shelf or something, press Page Up and Page Down to move it up and down, respectively. And, I'm assuming you know about 1-6 changing entitys' positions in 3 dimensions.
("The Hovering" ... sounds like a stupid paperback novel....)
Changing the connotation of "noob," one post at a time.