Who says it's a problem? Maybe it's normal. Mine does the same thing every once and a while. I think it's the camera adjusting it's settings due to background lighting and noise.
The green LED is a status light, and it's hard-wired into the iSight/FaceTime HD camera. If the light is on, the camera is on. If the light is off, the camera is off. So if it's blinking, the camera is turning on and off.
The green LED is a status light, and it's hard-wired into the iSight/FaceTime HD camera. If the light is on, the camera is on. If the light is off, the camera is off. So if it's blinking, the camera is turning on and off.