Hello
LED component is a legacy component and I would not recommend using it if you are using HC08 Full Chip Simulator or Multilink/CyclonePro as connection. The component is not working with these connection.
Also it will not work if you are using a Special or Standard Edition of the software. This component is available only in professional edition software package.
In order to define a LED and make it display value of an I/O port, I would recommend you to use the Visualization Tool component.
You can add one or several LED Instruments. Each Instrument can be attached to a specific memory address and Bit number in the instrument properties.
This should do it.
CrasyCat