Sounds like you're using RR in a home network install. I'd love to see what you have for a skin. I've never run X-10 Via RR, but have X-10 experience. First, you probably don't want to switch the indicator just based on the button push. I wait for confirmation from my X-10 controller before my indicators change.
What controller are you using? Is it a 2-way? Are your X-10 appliances 2-way compatible?