I just saw this for the first time, after sampling much of Fellini's later work over many years.
The most surprising thing to me was the sense that Variety Lights (VL) foreshadows Fellini's later "indulgent" work. Here, he bathes the viewer with genuinely warm, almost disconnected bits of life in all its spendor. The fine editing makes it all work; I laughed and sighed out loud through much of this movie, and the first 10 minutes hooked me. A little later in his career, Fellini (with help from other fine story people) showcased straight-up storytelling in La Strada and Cabiria. Subsequent to that, he began exploring "story space" in alinear, character-focused ways, from La Dolce Vita and beyond.
The point of all of this is to express my surprise that Fellini appears to have ended his career somewhat as he started it. VL is almost a "throwback" to the directions he took later in abandoning more traditional storytelling methods. Maybe it'd be better to put it this way: When he began diverging from a more conventional narrative style, he was actually taking a step *back* to the style we see in VL. A very good comparison is against his "Fred and Ginger," which explores story space in a studiedly chaotic way, then bowls you over by tying things together with a profoundly touching moment at the end. In "Fred and Ginger," Fellini gracefully brings together his old and new styles. In VL, he seems to bring these together before the new even happened!
The tremendous abilities of the actors and actresses are delightful in VL. Something conspicuous in post 8-1/2 Fellini is the purposeful lack of traditional acting craft; Fellini talked about this repeatedly in interviews. In VL (as in La Strada and Cabiria), Fellini shows that he was perfectly capable of directing actors who are plying their skills.
Because VL seems to cover the strengths of most of Fellini's career, it is a very fine example of the best he could do. Check it out.
