what firmware is yours running? mine's on b40.20140523.001 (came preloaded - i haven't tried to flash it to anything different).
here's how mine works: with power disconnected, if i press power, it boots up and is not recording. the REC light is off, but power and MIC are on. if i press the REC button, REC starts flashing, and the red dot starts flashing in the top bar on screen. if i press REC again, the dot disappears from the screen, and the REC light goes on solid.
plugged in in the car, when i turn on the car, it starts recording and REC is flashing in addition to the red dot flashing on screen. if i press rec button to stop it, the rec light goes on solid and red dot disappears from screen. to me, it seems like when you're not recording, the REC LED should be completely off, not on solid. behavior is reverse of the expected.
in my installation, i can't see the screen unless i practically stand up in the car (or move the mirror), since the camera's screen is completely behind the mirror. i can just barely see the three LEDs above the top edge of the mirror, and that's how i can tell whether it's recording.