Basically, I drive defensively and don't trust other people's signalling. (UK driver)

Too late to edit but thinking of it, neither do I. It just allows you to start planning/reacting earlier.

If you are taking the third exit (turning right) you have to make your way into the inside lane on entry and back across the outside lane on exit.

Doing this without indicating would cause chaos. As driving standards have worsened over the years this has become an all too frequent problem.

You select your lane as you approach the roundabout based on which exit you want to take. You then just follow the lane markings, which take you on to the roundabout, around it, and out your desired exit.

Here's a picture (of an unusually complex one; they're usually simpler than this): http://www.whereitis.co.uk/_Media/green-bridge-spiral-rounda...

I see the signal as a way to communicate inside the circular road, where normal lane rules apply: you keep your lane, and if the lane in right is free, you can switch to it after signaling. Repeat until exit.

Also, a left signal before entering is useful: it says you are taking the 3rd or more exit, and that you will make a tight turn around the center, with slow speed. This way, people entering after you can plan to pass you on your right and continue forward.