Does it automatically detect if you've hit something?

Ne can build I think with Redstone

I can't test it at the moment, so: are the arrows then stuck in the banner or is the banner destroyed?

Stuck in the banner:)

How does the pukt get in there

You could also shoot a wooden button, then you can also activate the redstonelamps

That's right, put a button behind it and you're done.
You make the point like this: http://www.needcoolshoes.com/banner?=pabt

The idea is good but the disguise is the biggest crap =P
you still get a like.

Only related to the outside =D
Bedrok as walls etc ?^^ that is not survival in this case but creatively what you have built =P .... build that just with survival stuff so it comes across better =)

@reaper after reading your comment with that grandiose spelling I would like to point out that the disguise is not the idea Pokemonser presented. The idea behind it is the banner that looks like a target. And that is both survivable and, in my opinion, a very good idea.

The wall is also just that it looks good

Looks like the Japanese flag
Cool gets a like