When I was in uni I did 4 1/2 years of psychology during which I got to learn a bunch of generally useless facts about the human brain. One of them was that the visual centres of the brain are highly tuned for noticing motion. Unfortunately when we're in traffic, although we're moving, we're staionary relative to everyone else so we blend in.
Flashing lights - especially directly in our line of sight - are interpreted by the brain as motion. Modulating lights at about eye level are the single best way of getting yourself noticed in traffic. These modulators are about the best safety device you can fit to a bike, short of kevlar armour.
