From firmware 3, the LEDs in TellStick Net describes the current status.

No light at all - Check power and ethernet connections All OK (if the power and ethernet cable is at all connected of course, the small lights by the network port Network port blinking green at constant intervals - Bootloading Network port steady yellow - Link Network port blinking sporadically green - Communicating

TellStick Net side LEDs:

Steady red	Waiting for IP	Trying to acquire an IP via DHCP
Steady purple	Getting server	Querying which server it should connect to. This will be successful or timeout so quickly that it will probably never be noticed. Will reboot on timeout.
Steady blue	Connecting to server	Trying to connect to assigned server. This will be successful or timeout so quickly that it will probably never be noticed. If it times out, TellStick Net will reboot and try a different server
Blinking blue	Waiting for reboot	After disconnection, TellStick Net will wait for a random time interval before rebooting and connection with our servers again. This is to avoid flooding if many TellStick Net are disconnected and then trying to reconnect at the same time.