I just picked up one similar to that (Nathan brand), here's a video clip of it running:

http://www.omnicast.net/~tmcfadden/Nathan_armband.wmv (1MB Windows Media Player video)

I have the same feelings about signalling. I wear a neon-yellow jacket most of the time, but it hardly shows in the dark without very close-range illumination.

1) do the motorists even have a clue what I'm holding my arm like this for in the first place? LOL, I've had people wave back to me when I do the "right-turn" signal (left arm held in an "L" shape)

2) can they see it from behind with my super-blinkies sledgehammering them in the retinas

3) can they see it from the front with the HID aimed at them

But I'm doubtful that a turn signal light would be a better solution than arm signals. They rely on the motorist being able to reference whether they're on the left or right of the vehicle's centerline. What might work would be to have a powerful steady taillight (LD1000 on steady mode, perhaps) to establish centerline, and then a powerful amber light on each end of the handlebar that flashes at the speed that people expect of a vehicle turn signal, like some of the ones from http://www.led-r-us.com. That would give enough separation from centerline that it might, uhhhh, give the right signals to the other road users. So far there's no commercial product like that, you'd have to make it yourself.