There have been a lot of questions on this forum about LED lights. My friend owns a paddleboard rental and he just installed a set of these LED's by Cape Ann SUP:

http://www.capeannsup.com/nightsups.html

I still think it's not proper, but I have to say I was pretty impressed with the results. They are BRIGHT! He plans to start doing night paddle tours of a local bay that has good night snorkeling. I still say proper lighting is what you need if you just want to be seen on the water. (red/green bow, white stern light) However, if you night fish or night snorkel, or if you wanted to turn on the lights to see what's below you at night, these guys sell a kit with the lights that get glassed in and a battery pack which gets put in a watertight compartment. It's made for SUP's but it would work on a kayak. I just thought I would share the resource. Looks like you have to call and inquire about the kit.

The big mega-yachts have underwater lights on the back and we like to call them "ego lights." I have a personal absolute dislike for them, especially when the boat is at dock and people have them on just so their boat stands out more (hence the name "ego lights"), or when you're at a quiet anchorage enjoying nature at night and some guy has to keep the ego lights on all night long. Now you can paddle past the yachties, pop on your ego lights, and say, "Nahhhh, that's nothin', I got ego lights too!"

So it's not my thing, but I have to admit I was impressed with the end result. For my friend it means now he can do night snorkel tours and turn more profit for his SUP rental. If you want bright underwater lights this is the ticket.

Oh, and by the way, they do make a kit that changes colors, and if you put those on your kayak I am going to be forced to kick you in the balls. The white ones I can at least accept as having some sort of possibly useful function, but if you turn your kayak into a disco it's a mandatory ballkick and revocation of your cool card.

Pic is from their site. Makes portaging at night much easier!