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Video with an LED
This video from Phandroid clearly shows an LED. In this instance it is red, probably indicating that it is charging. I've also seen a video with the LED blue. I'd think that would mean it was fully charged. What I haven't been able to find, or confirm, is if the LED blinks for notifications. But I'm sure that it does. It wouldn't make sense not to use it for notifications.
Originally Posted by jamex
I'm guessing that the reason the Epic has an LED light while the rest of the Galaxy S line does not, is because Sprint requested it.