Bicycle lights have really improved in the past few years. I recently got a new lighting system for commuting. This is one of the first lights that is both bright enough and long lasting enough that you don't wish for better performance. Price is the one remaining issue, and this should improve as technology matures.
Notice the battaries behind the seat post and under the top tube
The mounting bracket for the tail light is a sawed off Minoura SBH-300 water bottle cage holder with a PVC pipe screwed into the top holes
This setup will only work if you have a really high seat. My seat is usually even higher than this, giving me plenty of clearance.
a close up of the way the tail light is attached to the PVC pipe with an "O" ring
The rack on this Trek 520 has enough room to attach an extra PVC pipe to mount the tail light.
A slit is made in the PVC pipe to allow it to fit over the end of the rack. Holes are drilled in the pipe, allowing it to be secured in place with a shoelace. (I didn't say it was elegant)
The inside of the pipe is stuffed full of pieces of rubber from an old tire
Not all racks are designed the same way. This technique works on the Trek 520 rack, but would not work on others.