The yellow nose was a means of identification, yes, but originally used for exercises (I
think!) and which I believe was first adopted operationally during the general period of the Battle of Britain in 1940. At this time, both yellow and white were used and not only on the noses but on tail surfaces and wingtips as well.
Sometimes individual interpretations of the orders of what area to paint led to some really cool looking birds, and some rather gaudy ones! It was the norm to see 109's with noses which were entirely yellow or white. And most often only the rudders were painted with the vertical stabs being treated less so, but there were aircraft which literally had entirely yellow or white tailplanes. Wingtips were also painted. Some were very conservatively treated, others having a few feet of the outer wings covered.
Yellow and white were used for ID markings in almost every theater of war the Luftwaffe fought in, including the MTO and on the Eastern Front. Although the method of application had, by these later times, been clarified and the markings worn by Luftwaffe aircraft were more uniform.
As Upnorth stated, in Russia, the yellow was applied mostly to the bottom of the aircraft except for the fuselage band which usually wrapped all way round. Quite a contrast to those early days in 1940!
Fade to Black...