Real headlights as opposed to front flashers will have more depth to them than will be able to be accomodated in the depth of a reflector. I don't see using any other place but the handlebars for headlights but I haven't found that a problem. On my Giant 1/2way I have a Planet Bike front strobe, no-name ding ding pedestrian amusement device and two Cateye HL500II lights mounted so they hang under the bar. They all have ample real estate without counting the brakes/shifters/grips! When folded the bar first flips over and away from the bike and comes to rest against the bike upside down. There is no interference from the lights or other handlebar mounted accessories. They can all easily be unclipped except for the bell but I have not found it neccessary since if I am folding the bike that usually means its coming with me. There is a single big reflector/rear strobe by Cateye mounted on the seattube. The seat can be lowered without removing it and I find it a much better location than the much lower placement that a spot on the rear deck or fender would neccessitate.

H