I can't get it to work in Handcent. Has anyone experienced this?
Go into Handcent Notification Settings and disable the "turn screen on" when you receive a text. See if it starts working. Gingerbread has a built-in setting that disables the notification LED if your screen wakes up after the alert.
I'm the dev of Light Flow. I've heard reports of gingerbread actually running better for color control that froyo with my app on morotola phones. More colors seem to be supported than they were before (e.g. white works in the app which didn't used to)
As I don't have a motorola phone I can't confirm it, but thought you may be interested.