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

In normal operation, when not sending or receiving, the side LEDs are not lit, but the network port should have a steady yellow light, and the green light should blink occasionally.

If the network LEDs are not lit, please check power and ethernet connections.

Tellstick Net network port

Pattern	Description
Blinking green at constant intervals	Bootloading
Steady yellow	Link
Blinking sporadically green	Communicating

TellStick Net side LEDs

Pattern	Description	Details
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 at constant intervals	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.
Pulsing blue	Receiving data	Receiving data from a recognized device, for example a remote control or a temperature sensor.
Pulsing red	Sending data	Sending data, triggered from for example Telldus Live! or a schedule.