Yes it is nearly 100% useless when you're playing with randoms. Most people don't use JAV or Stingers and/or have no idea what the diamond with a dot in the middle of it on their 3d hud is.Hmm, well that actually sounds like it could be pretty useful then, especially when playing with a team or my IRL friends who play Engineer. Sounds useless if no one is working with you though. Once a target is designated do you have to keep it on them to be effective?
Is this also what makes the Javelin shoot up then arc down at tanks?
No, you can arc the Javelin yourself. Just lock on then aim wherever you want and fire and it'll arc back towards your lock.