I'm not sure where I stand on legally mandated helmets for bike riders. In Australia - or at least New South Wales - they are compulsory, but in the UK they are not. I wear one pretty much always anyway, except for the occasional short shopping trip. My bike lock will hold my helmet, so I don't have to carry it around.
Lights, on the other hand, really are essential at night. The Oxford police could make a fortune enforcing the law on this - it's apparently a £30 fine - as an awful lot of cyclists blithely ride around nearly invisible in the dark. (Though fewer now than two months ago: either Darwinian selection at work or the first years have got a clue!)
I just have ordinary three-LED front and back lights (I haven't gone bike light crazy), but I'm using rechargeable batteries with a regular recharge schedule, so I don't spend half the time with dim lights. I also have a fluoro yellow rainjacket.
I always keep an eye out for how visible other cyclists are, both when cycling myself and when driving. I suspect most of the students cycling without lights don't drive themselves. And Oxford drivers are probably so good around cyclists because they are mostly cyclists themselves. (I certainly feel a lot more comfortable around bicycles now.)
I do'nt think helmet laws should include bicyclsts (but motorcyclists, for sure). Here in the States, the helmet law applies only to children up to 16 years old. As a lifelong cyclist I've had my share of spills, and have *never* hit my head -- the impact area is invariably shoulders, hands, or hips. As for riding at night I try to remember my LED flasher (powered, like all of my little units, by rechargeable batteries) but it's not essential because I ride very defensively -- it doesn't matter if the drivers can see me or not, because I never put myself into a position where it matters. Even riding along the extreme right, as usual (this is the States, remember) it's only going to be the way off ocurse motorist who'd possibly hit me, and that's never happened -- they've never come close (although I've learned my allowable tolerance -- practically zero, as a miss is as good as a mile -- are unacceptable to less fearless (and way less experienced) cyclists. Also I don't utilize a headlight as they spoil my night vision and their area of illumination has been traditionally inadequate (although I've never tried one of the modern types) -- and like I said it doesn't matter if others can't see me because I can see (and sometimes more importantly, hear) them, and ride accordingly.
I'm not sure I buy the "doesn't matter if they can see me if I can see them" argument. That may work for cars, but if other cyclists think like you, won't invisible, near-silent cyclists be a risk to one another? (There's probably some game theoretic construction here.)
My idea of defensive riding is to sit right in the middle of a lane, where drivers can't miss me, I'm not at risk from parked cars opening doors, and I have plenty of room to maneuver if something unexpected happens. Mind you, while that works well in Oxford, I'm not sure I'd take the same approach in Sydney (where many drivers are hostile if not homicidal to cyclists) or anywhere else.
As I spend much of my working hours on the road, I can vouch that bicycle lights are of paramount importance. People riding with no lights on are just blobs in the dark. They have everything to lose. The usefulness of the helmet is coming into question. There are road safety experts calling for its abolition. That is why the bike rental scheme is not taking off as it does in cities like Paris. People just don't carry a helmet in their back pocket. Only Australia and NZ enforce bike helmet law.
Riding on the extreme outer edge (ie left in a left-hand drive country) is only safe if there are wide roads, no parked cars, and preferably bike lanes that are respected. None of this applies in Oxford. The one time I've come off my bike it was because I wasn't taking up enough of the road and someone opened a taxi door. As for bike helmets and not hitting your head; I think the helmet is a bit like life insurance. You certainly hope you're not going to need it. OK, so I haven't taken out life insurance. Helmets are cheaper.
I ride without a helmet on the small island I live on in Qld, Australia, as it is a little like a frontier hamlet, with no police station, a lazy holiday atmosphere and /generally!/ no fast cars etc. We don't wear seat belts in cars or helmets on bikes, it is a lazy relaxed way of living - I see a lot of the bikes in the park/ride bike/hire arrangement established by Brisbane City Council sitting there unused, due to helmets being compolsory and somewhat mitigating an impulsive bike ride across town. If Europe can do without them why not us Aussies?