And the vector between the vertex and the light source changes

vector increases, the grey color is scaled down. At some point the incident light vector and the vertex normal is greater than 90 degrees. At that point the vertex will no longer be lit since its normal is facing in the opposite direction of the light direction vector. With Gouraud shading enabled, the faces using such vertices fade away into darkness.

Fig 5.7 shows the same cylinder with the same intense white light shining on it. However, in this example, the material used by the cylinder only reflects green diffuse light. So the red and blue color components of the diffuse light that hit each vertex are totally absorbed and the object appears green.

Specular lighting creates surface highlights that make objects appear shiny and smooth. Unlike diffuse lighting, specular lighting is view dependant because light is not scattered equally in all directions. A perfect specular surface (like a polished mirror) would reflect light such that it mirrored the incoming ray. A rougher specular surface like a metallic facade introduces some scattering but nevertheless reflects light in a roughly mirrored fashion (i.e. still primarily along one directional axis). As the angular relationship between the camera look vector, the vector between the vertex and the viewer, and the vector between the vertex and the light source changes, the highlights will appear to move across the surface of the object.