I don't use lights during the day and I only use solid beam front and rear lights at night. Granted, I mostly only ride at night on my ride home during winter and my commute is mostly suburban, with some "light" urban sections. My concern with the blinking light is that people might drive in the direction of the thing they are visually distracted by... I was recently driving behind a guy who had a passenger side front and rear wheel in the middle of the bike lane for at least 100 feet while gazing at the rear-end of a female jogger on the bike path parallel to the road... driving in the direction of where his visual attention was, probably unconsciously. Luckily, I wasn't in front of this guy on a bike.
I was in downtown San Francisco between 5pm and 6pm the other day and was amazed at the number of cyclists with blinking lights.