LED lifespan is rated to a percentage of the initial brightness. Most LED lifespan estimates are to 70% of initial brightness. Luxeon LEDs will get slightly brighten over the first few thousand hours. The brightness dropoff is very gradual at first, then steepens near the end of the LEDs life. LEDs don't simply blink off unless there is a major failure due to a power supply problem (such as being severly overdriven or severly overheating).
5mm LEDs are shown to not get anywhere near their rated lifespan, due to a poor thermal path from the LED chip, and the clear epoxy encapsulent yellowing/fogging over time. This is especially true of blue and white LEDs, where the blue light significantly acellerates the degridation.
Luxeon LEDs will actually achieve their rated lifespan if properly heatsinked and driven with a proper current regulator. They have a very good thermal path from the LED chip to a heat sink attachment point, use a silicone encapsulant to ease bond wire stress, and an acrylic dome to prevent yellowing/fogging.
Read this document from lumileds, it shows the effects of heat and drive current on several types of luxeon LEDs, and is using actual test data:
http://www.luxeon.com/pdfs/RD25.pdf