They still work, but I believe only when the screen is off. In theory, you shouldn't need to have LEDs blinking when you would also get a notification in the tray up top. It's just redundant. So when the screen is off, you can't see the notification tray, then the LEDs kick in. When screen is on, only notifications on top are used.
Or at least thats how I understood it with the newer 2.1 (ere & ese) ROMs.
I've been flashing so much the last week I can't keep up with who has what anymore haha.