The blue WPS button on the top of the router either stays lit or (almost all the time) flashes every second or so. It's a much slower blink rate than when you've pushed the button to connect a wireless device via WPS.
The manual only mentions blinking amber or green. Amber indicates that the WPS is not connecting when a connection attempt has bee made, and that is not my issue. "Blinking green" (I haven't seen green, only blue) apparently means that "The router is using WPS to add a wireless device to the network", and I REALLY hope that is not the case.
The router is newly installed yesterday, flawless dual channel wireless plus guest, everything seems to be working great (though printing to my wired Canon ImageClass seems now seems a LOT slower than on the old Linksys/Cisco WRT54G2 router). I've successfully connected devices on the wired ports, connected wireless devices manually on WPA2-PSK encryption and via the WPS button.
Firmware version is current latest at 126.96.36.199.
I have seen the post entitled "WPS blue light dome blinks on WNDR3400" at http://forum1.netgear.com/showthread.php?t=72571 , but that guy had a V1 while mine is V2, and he got no conclusive solution to his problem. I'm hoping that Netgear hasn't purposely built a lighthouse on the top of the router that I just installed in my den. Surely there's an actual, non-workaround solution besides duct tape or something. This is ridiculous, who would want this?!?