Can it be mounded so it points vertical instead of horizontal?
Yes, I've had it both ways, in fact the vertical mounting is probably more secure. I've currently got the rear one mounted vertically on my seatpost. I've also mounted it horizontally on a rack, and vertical on a seatstay, no problems with either.
I've even tried mounting it verticaly on the headtube underneath the bars (obviously mines a rear light so I wouldnt run like this) and it looks perfectly secure. My only issue with this would be that the light then points straight in front rather than being angled down towards the road..... a small wedge under the top oring mount would probably correct this though.
In fact I'm now seriously considering this setup for a second light (in addition to a Vision 1) as I can see this being a really neat setup for a close "flood" light which would compliment the hopes more focussed beam pattern nicely.