I'll let you guys continue debating best practices. But it does seem that the USCG's minimum requirement for dinghies at less than 7 knots is just a 360° white light, especially for an inflatable upon which mounting the red/green lights could be deemed un-"practicable." Many of you are complaining of the 360° lights interfering with night vision, and you have proposed using plates to reduce the glare inside the boat.
As I mentioned awhile back, one highly portable, inexpensive light that would seem to meet the bare minimum requirements is this one, which Sunsail provided for their BVI dinghies:
As I recall from when I used that light, its lens focuses a very intense ring of light on a flat plane, resulting in minimal (but some) bleed into the boat. This strong directionality also focuses the intensity in a very narrow band, so that its somewhat dim light will still be viewed from a significant distance even though it does not consume a lot of battery power. When we used this light in BVI, night vision was not an issue because there was always so much stray light around from land, so I did not really get a good test of the light's bleed.
I have two emergency strobes mounted inside our inflatable PFDs right now, and I've been wanting to get a third emergency light for our "guest" inflatable PFD. The above light is just $10-11 at Defender and Amazon and is very skinny and easy to store, so I think I'm going to pick it up for the PFD. If I ever unexpectedly have to use the dinghy at night, I'll have this handy to satisfy the minimum requirement.
If I ever plan ahead of time to use the dinghy at night, I would purchase a red/green light and figure out how to velcro it onto the bow. But I'm not going to spend the money for that until I have a specific plan to use it, since I'm mostly just a daysailor.
...You're an urban liberal Democrat...
Thank you for the compliment.