The blinking lights are cpu/ssd (hdd) usage.

Same as how your pc lights blink for cpu/hdd usage.
You can disable these. I made a thread for NITDroid which has that in there.

I ran my phone for around 6 months in RD mode.
It also stops programs from 'force closing' if I remember correctly.

If you don't have a need to be using RD mode, don't.