I would say that on the tail light, the brighter the better for an urban commuter. As cars approach from behind, you want them to not only notice you, but you want them to notice you from as far back as possible so that they have plenty of time to give you a wider berth as they pass.

For headlights, it really depends on what you ride and what the streets are like. If there are streetlights where you ride, then the need for a super bright head light is lessened... and you probably just need something that helps you be noticed when cars are turning into your path. However, as with the tail light... the brighter the better. If it means the difference between getting T-Boned by a car and making it safely through the intersection, I think it's worthwhile to go with the brightest option in your price range.

For me specifically, I ride a folding bike with 16" wheels. Being able to see what's on the road ahead is very important. A pothole on 700c wheel feels a lot different than a pothole on 349 while.