Ok, Just been down to the Road And Traffic department of my local police station, slightly intimidating, lots, and i mean LOTS of police cars and officers about, but did notice their fleet of unmarked cars, Im not sure if I would be legally allowed to tell you what they are but believe me, its not a fiesta, primera or volvo, but it is very quick.
Anyway, I got the exact law on neons (I say exact, its actually pretty vague) The only laws you offically break with undercar neons are; Showing a red light to the front, Showing white to the rear, Showing blue anywhere (dependant on what colour your neons are) But......I was told that its police officers discretion wether you are causing a distraction to other motorists in which case you will recieve a 30 pound fine, or a court appearance.
Apparently if more and more people do install undercar neons, then a law will be introduced that specifically states wether they will be legal or not, I think although this will probably mean they'll be illegal, it will make it clear wether they are legal or not.
Basically, as some people have already said, Don't drive round with neons switched on, park up and let them glow.
Hope this has helped.