Use eth-lightwallet with Web3ProviderEngine

init.js

            var keyStore = ...init as usual...;
            var engine = new Web3ProviderEngine();
            var opts = {
                getAccounts: (cb) => {
                    let addresses = keyStore.getAddresses();
                    let prefixedAddresses = addresses.map(add => {
                        return '0x' + add;
                    });
                    cb(null, prefixedAddresses);
                },
                signTransaction: (tx, cb) => {
                    let signedTransactionCallback = (error, result) =>{
                        cb(null, result);
                    };
                    keyStore.signTransaction(tx, signedTransactionCallback);
                }
            };
            var hookedWalletProvider = new HookedWalletSubprovider(opts);
            engine.addProvider(hookedWalletProvider);
            engine.addProvider(new Web3Subprovider(new Web3.providers.HttpProvider('http://myblochain.io:8545')));
           
            engine.start();
            var web3 = new Web3(engine);

If you use WebsocketProvider instead of HttpProvider and you use Web3 1.0.0 it currently does not work due to the lack of support of newer version of web3 (at current state : today is 03/22/2018)

What does your keyStore.signTransaction method look like? I'm not sure where a password would be provided here to perform the sign.