It all depends on where you live.
They were quite common in California, for example, and I would often flash my lights in rapid succession to get them to change (great way to get a ticket). In Florida, however, the state never bought into the technology, so they're nowhere to be found.
The reason that flashing lights make them change is because they think an emergency vehicle is approaching. Sounds like a great idea, but too many people (like me) caught on and took advantage of it, so it's being quickly replaced by on-board transponders found within the emergency vehicle itself. Other states are switching to a more "intelligent" sensor that only sences high powered strobe lights that flash at a fixed frequency.
Depending on where you live, you may have noticed police, fire, and medical vehicles flashing bright, white lights over the last two years or so. That means you've got light sensors in your area, but flashing your regular headlights the way I once did won't work, anymore. Gone are the good old day of short-live red lights.
In the end, your friend was half right.