Headset ON/OFF button only flashes when in the charger, and there are no battery lights.
When this happens, the headset is trying to tell us that the base thinks that there is no battery in the headset. Now, this can mean a few things: the battery is not in there, it is in backwards, or there is some error in connection between the headset and battery.
To fix this up (or attempt to), try an unplugged reset (article with instructions inside link), make sure the battery is going in the right way. For good measure, you can push the battery in a little bit harder, which can sometimes force it to make contact with the metal prongs and get into pairing mode.
If this doesn't work, replace the BATTERY.