It seems I was not fully understanding the settings......in the messaging application I had the correct notification settings but in the Menu --> Settings --> Sound & Display --> Trackball Settings were not correctly configured. Once I selected "Pulse notification light" it seems to be working.
Minor Rant:
The wording is misleading though....why would a notification under "Trackball Settings" override the notification in the messaging app and all other settings (for missed call or gmail alert)? The explanation under "Pulse notification light" reads this option will "Pulse trackball light repeatedly for new notifications"!!!!!! It seems quite logical any settings under "Trackball Settings" would affect devices with a trackball and the Droid doesn't have one sooo?!?!??!?!?!?!?!
Minor Rant:
The wording is misleading though....why would a notification under "Trackball Settings" override the notification in the messaging app and all other settings (for missed call or gmail alert)? The explanation under "Pulse notification light" reads this option will "Pulse trackball light repeatedly for new notifications"!!!!!! It seems quite logical any settings under "Trackball Settings" would affect devices with a trackball and the Droid doesn't have one sooo?!?!??!?!?!?!?!