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Along the status bar at the bottom of the Virtual PC window are a number of useful status indicators - also known as 'blinky lights' (at least that is what they are called by most people on the development team). A couple of interesting things to know about the 'blinky lights' are:
A green light stands for a device read, while an orange light stands for a device write. In the case of network cards; green means 'network packet received' and orange means 'network packet sent'.
If you have multiple network cards / hard disks / shared folders the light blinks for all devices (and there is no way to tell which device caused the blink)
The network card will blink whenever it receives a packet - whether it is actually meant for the virtual machine or not. This means broadcasts / multicasts get displayed.
The third item listed above lead to the interesting case that shortly after beginning at Microsoft (and working on Virtual PC 2004) we had a bug filed that the 'blinky light' for the network card was broken because it was always on and always green. A bit of analysis revealed that no - there was nothing wrong with Virtual PC - it was just that the Microsoft corporate network was so noisy that the light is always on.
Cheers,
Ben