I don't notice the drag when the light is on. I've ridden the bike with two front wheels where the only difference was the hub. Never felt any discernible difference between the two. Of course, if the bike was 10 pounds lighter, and I wasn't carrying 10-15 pounds and panniers, AND I wasn't running 32-35mm tires, then maybe I could notice the difference.

The beam is fine. My route is a mix of pitch-black, suburban, and dirt road riding. It works fine as long as I'm going fast enough to keep the light fully powered. When I'm going too slow, I rely on a Planet Bike 2W or Princeton Tec EOS to "fill in" for the dimmed Lumotec.