Okay so here is my 2 cents and what I have determined.
When I first got the phone, I immediately input my Google account information and until I ran into this thread didn't realize that my notification light didn't work. I decided that is lame so I restored.
Restore #1 - Upon second run through, I didn't input Google information until it fully finished loading, etc. When I did put in my google info I stopped Market from downloading any of my apps. I did the one by one method. Prior to installing I did text messages to myself and was able to see the notificaiton blinking like it should (note that the blinking for notification is fairly bright and noticeable, but the charging one is dim and subtle). After installing the apps I wanted and leaving out any garbage that was auto installing, it was still working perfectly.
Now as soon as I decided to run the HTC Backup that I had via the OEM HTC Backup app (comes on T-mobile version stock), my LED notification broke again. I intended to run it just to get the text messages I had back, unfortunately whatever setting messed it up to begin with, messed it up again.
Restore #2 - Same as above, except I didn't run HTC backup utility to restore settings. I just lost messages for the sake of getting LED back. As of right now my LED works perfectly and blinks when I have notifications. I periodically send myself texts still cuz I'm paranoid and sure enough still works. I setup HTC backup to make new backup now that it works fine.
Important notes - If you are coming from a Samsung like I did, I feel there could be something conflicting with the phone that got loaded when I setup my new HTC. If you are coming from something other than Samsung, then maybe there is just a general bug with HTC not liking something other OEMs have on their phones. At the end of the day, there is something software related causing the issue and should still be fixed no matter what other OEMs bring over. Also, as everyone else has stated, there is a cut off to when the LED stops blinking, but I think it makes sense in the context of what it's for anyway. If you check your phone often you have that 5 minutes to actively see the LED and know you have something there. If you don't check it within that 5 minutes while it blinked, it will save the LED and more importantly you will check your phone anyway so the time limit is not a big bother to me. I just wanted it to work.
I hope this analysis helps someone else out there. Let me know if anyone else made the same observations.