Apparently it blinks the LED flash three or four times rapidly when you have an incoming call, text or other notification. I don't have a 4 so I haven't been able to test this, but you can find some YouTube videos that demonstrate it.
What I've been trying to find out is whether the flash blinks again every once in a while until you acknowledge the notification -- or only when the notification first comes in. If it's the latter, then it's not very useful for those trying to replicate the BB feature. Which, granted, wasn't what it was intended to do.
I wanted an led notification light as well. There's more than one benefit and with my droids and Berrys they really let me know when I have a message and what type it is