Eddi Reader's handwaving does look pretty stupid (albeit not as stupid as what she sounds like, any of her videos are improved by turning the sound off).

On the other hand, any singer who's been trained in Indian music will be using their hands for a real purpose. The hand movements encode the underlying rhythmic pattern of the song, which is not always directly perceptible in the melody. (The only time I've tried to get this was being shown it by a Gypsy singer in a railway waiting room in Transylvania in the middle of the night: I didn't get it, but she persuaded me that it was worth getting).