Bike tail lights are cheap enough that it doesn't make sense to skimp on them. The Planet Bike Superflash is about $30 and is excellent. The Cygolight is said to be noticeably better and doesn't cost much more.

Using flashlights as headlights, however, can save a lot of money. Unfortunately, my 18650 headlight isn't visible from the sides. In the end, I think a purpose-built headlight is best. Also, I think the ideal beam is produced when the light is mounted slightly above or slightly below the tire (when you have a 700c wheel).