Thanks Vyacheslav, you pointed me in the right direction.
For future reference, I changed #!/bin/sh to #!/bin/bash in /usr/lib/hal/scripts/linux/hal-system-lcd-set-brightness-linux and now it works. Even though, just clicking on the Brightness Applet dims the screen. The Volume Applet does not do the same.
Thanks Vyacheslav, you pointed me in the right direction.
For future reference, I changed #!/bin/sh to #!/bin/bash in /usr/lib/ hal/scripts/ linux/hal- system- lcd-set- brightness- linux and now it works. Even though, just clicking on the Brightness Applet dims the screen. The Volume Applet does not do the same.