How important are incense and candles to a meditation practice? What is the function of incense and candles to a meditation practice? Are they used in all types of meditation or only some types?
Incense and candles are not essential to a meditation practice. They can aid in concentration, but they can also become an emotional crutch if we become attached to them. I did the ritual of lighting candles and incense during my practice for a few weeks, and quickly got tired of it.

If you are practicing vipassana (a.k.a insight meditation) as opposed to samatha (a.k.a tranquility meditation) then it's really not necessary to create that kind of environment. In fact in vipassana we want to become free from external dependencies, so creating a certain type of environment might actually be counterproductive to the practice.

I'm one of Venerable Yuttadhammo's students, and he teaches vipassana in the Mahasi Sayadaw tradition. Check out his videos and/or book if you haven't already.

Unfortunately I can't comment on samatha practices, as I haven't been taught in that area.