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You're mostly right but HID's can go in either standard reflector or projector housings. The important factor is that the housing is designed for HID since they produce significantly more light (a normal headlight is 800-1000 lumens versus an HID that makes as much as 3200-3500 lumens). Auto-leveling housing are the best and required in europe if I remember correctly. Unfortunately not all projectors are created equal and even some projectors can glare when HIDs are installed.
I'm almost positive the reason HIDs glare so much is most of the kits sold are the on/off variety without a high beam function. After installing them people turn the headlights up somewhere between highs and lows and leave it that way to make up for the lack of high beams. This is why it glares so much to other drivers, because it would if even normal bulbs were installed.
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