Some other comments here seem to indicate (at least in recent models?) that it's a visual indicator light on the phone that the camera/mic is being accessed. That might be sufficient, although I might also like a small audio cue on lock (or camera engage/disengage while locked).

Unfortunately, I doubt Android will ever be able to rely on a separate visual indicator of recording, since that's another hardware component and probably hard (if not impossible) for Android to enforce.