Yep. It's for hearing impaired. It's like a rave in a dark room with an iPhone.
The problem is that the user has to be in the same room to see the light flashing to know that there is indeed a message coming in..... I tried it for a couple of hours and quickly realized the futility of it.
As for vibrations -- that's fine if one has the iPhone in one's pocket or sitting on a surface where the vibration would cause the device to rattle, thereby catching the user's attention. Again, one needs to be in close proximity to the iPhone for this to be effective.
I for one would greatly appreciate some sort of notification system which would work when the iPhone is not in active use, is just sitting around in sleep mode. I have missed calls and texts because I've been in another room when something has come in and I haven't heard it happening and when I return to the room with the iPhone I don't think to immediately check it to see if I might have missed something. Hours...maybe even a day or so can go by and I don't know that I've missed calls/texts. It's very annoying. Not a deal-breaker but an annoyance.