Oh my god!
I'm a mac newbie, and thought after updating my newly received macbook air, i had a big problem.
Keyboard lighting turned off automatically. Sitting in the middle of the night playing with my new machine. Thought i had problems with my keyboard lighting, but after reading this thread, realize that it should turn off automatically when in bright conditions. Thanks.
The sensor is not in the camera. It is just to the left of it. If you look very closely, you will see the almost-microscopic holes in the aluminum which hide the sensor.
As for the backlighting you need to be sure the brightness is set manually to whatever level you wish first. If you have it turned all the way down, then when you go into a dark area, it will appear that the light is not coming on.
Basically you can tell if it is working if the manual buttons adjust the light. If the computer detects that it is bright enough to not need the light, the manual buttons won't do anything except pop up an icon telling you it isn't working.