The reason drivers can't judge distance is because from the back is because a flashing red light is confusing since cars tailights don't flash. Also most bikes rear lights are small and or dim causing an optical illusion that your further away then you really are. Not much of answer for that accept try multiable lights in the rear. I run a Blackburn Mars 4 on the rear which is not only brighter then the Planet Bike SuperFlash, but it looks larger from the rear, not to mention far better side (amber) lighting and more reliable. Then I also have barend lights. I leave the Blackburn on steady and the end lights on flash, then couple that with bright wide reflective leg bands and so far I have no issues with cars from behind, in fact if anything they give me more space at night then during the day!
For the front your dealing with the same sort of problem; no matter how bright your headlight is it's still a small diameter light that makes drivers think your further away then you really are. So you need to attrack their attention to you, you do this by adding a front amber or white flasher. My bike light is just a 15 watt dual beam (looks bigger then a single beam) halogen. Then I also ride with a helmet light, not the brightest helmet light, just a 3AAA BLT Super Dopler flood, but with it I can take the light and move it right into a drivers eyes if I want to make sure they saw me.
