iOS 5 will add flash LED notification in the iPhone 4. Back Flash will notify you when someone call you, when you receive an email or text etc. With FlashEnhancer you can do the same on an iPhone 4 running on iOS 4.
You can configure the settings of your iPhone applications to make use of Flash, you can set the amount of light, you can select whether locked or only unlocked works, you can even select intensity of LED when your battery is low. FlashEnhancer is available in Cydia and you can download it for $3.