Windows 7 has a different network activity icon in the system tray when compared to XP which had a network icon which blinks. We had covered a free utility to change the network monitor icon to the one in XP. Here is another free utility which can bring a blinking network activity icon for Windows 7. Once you install the app, it works from the system tray.
If you want to remove the default icon which comes with Windows 7, click the Customize link in the system tray and hide the network activity icon.