Grog-
Absolutely right ON. This is how I always ride. I got all these ideas incidentally, from the great book "The Art of Cycling" by Robert Hurst. He has spelled it all out quite exactly.
Before that I rode cautiously (and I thought safely) and didn't even realize that I was actually putting myself into dangerous situations by my submissive style of riding. That book really opened my eyes and made perfect sense to me.
When I changed my riding style I immediately noticed how much safer my ineractions with cars were. Now I do not give dangerous situations a chance to develop, whereas before I would blithely drift into danger and then react to it, but I was already in danger.

I take the lane at every tricky intersection, even when going straight. I give cars BIG hand and arm directions ALL THE TIME, and I find they are happy when I do, and we all exchange friendly signals or nods afterwards.
Cars honestly don't know what to do with bikes, and it helps for us to let them know what we are going to do, and what we want them to do. No drifting about in the periferal no-man's land or Devil's Triangle.

Be confident and clear...but...TRUST NO ONE and ALWAYS assume they don't see you (unless they are communicating with you) or may do the wrong thing at the last moment. Have an escape plan for every situation in the back of your mind, and update it constantly as you ride in traffic.

Good post!