The light, as others point out, is much more likely to indicate drive activity not CPU activity.
If you are running Windows Vista the default Resource Monitor view will show I/O activity as well as overall CPU activity and memory use. To get to this click Resource Monitor on the Performance tab of Task Manager (to get to Task Manager, right-click your task bar). As well as the graph at the top, the Disk section of the summary below will list disk activity (the closer this % figure is to 100, the more time the OS and apps are spending waiting for I/O operations to complete) and overall throughput. If you click the disk summary row it will given an indication of what processes are actively using your drives.
The memory details may be helpful for diagnostics too. The faults/sec and faults/min figures indicate how much disk->RAM activity is happening. Don't let the work "fault" worry you - a hard page fault just means a processes accessed a page that was currently available in RAM for that operation so the OS needed to read it from disk (either from the program's file or swap space) or make a new copy to write to if it is a copy-on-right page. If you are seeing a few page faults per second during normal operation, or even a few tens, this is quite normal. If you are seeing many specially if it stays high for a period of time then you machine is likely to be thrashing your swap space implying that you either need to close some programs or install more RAM (or that you have a program running that has a memory leak, in which case restarting that may clear the condition).
This information is likely to be accessible in the same place on Windows 7. If you are running XP or before you'll need to make your own graphs in perfmon and/or use 3rd party tools, such as some of the very useful sysinternals utilities, to get the same information.