That's not a power light, it's a sleep light. There IS no "power light" on an iBook G4.
In some cases, the light will not fade on and off when our computer is put to sleep with the lid, though it ALWAYS fades on and off when we use the menu command. I do not know why this is. Is this what you are experiencing?
I should also note that this is kind of specific to the iBook, so I'm going to move this thread there.