にて
 

灯台にて。
I found this as a chapter title in a book and after going crazy for many long minutes and going through 4 dictionaries I managed to find that it is the original form of the particle で.

Is this form still commonly used today and if yes, it does apply to all the uses of で, such as にてある (for である)?

I think its a literary thing (probably formal). I read nothing serious in Japanese (can't read enough kanji yet) so i don't know if its common.

Everybody can read kanji, it is enough a dictionary at hand. Trust me, it takes me a whole day to read 1 page...I am not that advanced either.
But reading will get you used to recognizing the phrase structures, which trust me in Japanese are far from easy.
Everyone worries about kanji when you can easily translate them. But not always having the translations will make understanding the meaning easy. A typical phrase in Japanese book is longer at least 3 times one in English and it is easy to get lost.
Don't wait to know 2,000 kanji by heart, coz it is wasted time.

@chryuop
Well, I partly agree with you. Of course, in my opinion and obviously in yours, the best way to learn the common meanings and remember them by recognition, is to read and look after in a dictionary. But I think, if you really want to learn the kanji by heart, so that your're able to write them down, you'll have to learn them properly by writing and using them. Unless, you have a good photographic memory. Otherwise it's still a good practice to read, no doubt about that! Especially for compounds.

But, like I said, that's only my opinion... :)

I do read. I meant i don't read lot (of proper literature) because of exactly that reason (i have to use a bloody dictionary) :P that's why i don't know if its common.

Reading is just one part of my studying. And I actually look up the same word more than once because by the time I re-encounter it I have already forgotten it.
I do written exercises sent to me by a Japanese person. I write to a Japanese pen pal. I read everyday my kanji flashcards adding 10 every once in a while. I read books. I read forums because it is a huge source of information.

Study is not just 1 thing and requires dedication.

The Hiragana character で means de
にてある = nitearu
である = dearu

に = ni
て = te
あ = a
る = ru

No, the character で is pronounced de, doesn't mean de. It has several meanings which can be summoned with "by means of" and "at (when an action takes place in that spot)".
Said that...that was not my question :O

That is what I meant mkay?

にて is the location marker very often used in writing and formal speaking. It's not a dead word at all. In fact, you will sound so terribly childish if you replaced にて by　で. で is much more informal.

「灯台にて」is a good example. It cannot be 「灯台で」　at all as a chapter title. It sounds too light as one, probably except for in children's stories. But when you say to your friend, "Let's meet at the lighthouse.", you would have to use 「灯台で」. If you said 「灯台にて会いましょう」 to me, I'd say to you, "What are ya, a Shakespeare actor?"

I wish you hadn't brought up である here, though, because the で in　である is not a location marker. And we don't say にてある, either. I sense a pretty big confusion in you between the two location markers, に and で. I won't do a full explanation because I've already done so a couple of times on JF. I suggest that you re-study に and で though I'm in no position to say it. I say this because　in meaning:

にて = で
にて ≠　に