The iPod will always flash this when mounted. This is telling you that the iPod and the computer have established a connection. You should not disconnect the iPod with this flashing or you run the risk of corrupting the iPodis hard drive or the iPod database. Be sure to unmount the iPod before disconnecting it from the computer. In 3rd, 4th and 5th generation models, the iPod will change to the Main menu when it’s OK to disconnect. In 1st and 2nd generation models, it will flash ‘OK to Disconnect’ when it’s safe to disconnect.
I'm a passionate, long-time lover of Apple products, and was a civil draftsman and graphic designer before creating the iLounge web site. My prior projects include work for The Los Angeles Times' LATimes.com, and the company Creative Domain, where I developed websites for clients including Columbia Pictures, Disney, Fox Studios, Universal Pictures and Warner Brothers. As the Publisher of iLounge, I direct the site's community forums, photo galleries, iPod User Group, and general business affairs, which have grown under my watch to over sixteen million page views every month. I'm happily married with one daughter, one dog (Rocket the Wonderdog), one cat (Ferris), many iPods, iPhones, iPads, and two turntables.