So, what's the best kind of light for night riding in town?

I have this really powerful white headlight thingamajig, but when I was riding in the dark once I guess it shone in some drivers face and they were still quite a far ways and they honked at me so badly it nearly gave me a heart attack. I have been afraid to use it ever since.
I didn't want to turn it off then because I was on a very dangerous hill that has no bike lane and I also needed to see where i was going.

I think the light might be too bright though. Or maybe I had it pointed up too far so that it was blinding them? Any tips or advice you can give me?
Maybe that driver was just being a jerk?