On the IS200 the needles glow red, yes. The dash is lit up from behind, i.e. the light comes through the numbers/symbols etc. The OEM setup is with little bulbs that have orange "caps" on them. Quite a few people end up replacing these with LEDs, although depending on what type of LEDs you use this can either work very well or pretty badly (e.g. which way the LEDs project their light).
All the gauges on an IS200 light up perfectly with the OEM setup (yes, the same sort of intensity), and should do so still using the right sort of LEDs as a replacement. I can't imagine that the Altezza would be any different.
I wonder if someone has just done a very bad job trying to convert your dash to LEDs ?
Here's a pic where you can see the IS200 dash lit up, with the OEM lights :
And here's an IS200 dash with blue LEDs :