I keep it on my harness bar... so people can see me (so we don't collide on the water) and so they can find me when I end up hurt somewhere in the dark. Also so I can see the quick release, and the hook when I am trying to hook or unhook. Also, so when they come in to land, they know I am another rider willing to catch their kite, not just some guy walking the beach at night.

I don't think lights on kites help much... they aren't bright enough, and they are usually hidden by the canopy anyway.