For driving lights, you want to mount them as high as possible. For example, take a flashlight outside at night and look how far the light is thrown at varying heights. In the case of driving lights, we're using them at speed and they're much brighter than any flashlight. As little as four inches in mounting position will make a material difference in down the road performance.
In the case of running lights or fog lights, you want them as low as possible to improve visibility to cagers (the aforementioned triangulation) and to get light under the fog layer. I've had good results with mounting fogs on the forks. Engine crash bars would be a good location optically but the vibration tends to be hard on lights with filaments. LEDs would probably be OK though.
Driving lights washing out turn signals is a non-issue; If the lights are on, there's nobody in front of you to see the turn signal.