As far as I know, it means that WiFi is enabled, but not connected. You can see it blinking even if wireless network is in range, but you didn't choose to connect automatically. I've also noticed that available network isn't listed then, until you press refresh button.
It means that wifi is enabled but no networks found. If there are no networks in the vacinity then it will just keep scanning in the background. If you have no use for the wifi and the blinking disturbs you then its better to probably disable it.