For those beginners like me who may be struggling to get some of these basics figured out, I thought I would post what I did to successfully get the LED to turn on and off based on whether RuneAudio is playing (on) or paused/stopped (off).
Preliminary notes: I connected the LED to the pin assigned to GPIO17... if you use a different pin you need to make sure you specify that in your code. I also appear to have done this all with Python 3, and if you are using Python 2 you will probably need to make adjustments to the code - but don't ask me what those should be

... finally - the code is probably not very clean or efficient - I'm sure there are better ways of doing what I want it to do - maybe for example using the MPDClient.idle() command... but I was becoming impatient to get this working and I found a path that brought me where I wanted to go. So, without further ado:
Step 1: I used nano to create a python script called statusled.py in my root folder:
#!/usr/bin/env python
# -*- coding: utf-8 -*-
# IMPORTS
import sys
import time
import RPi.GPIO as GPIO
from mpd import (MPDClient, CommandError)
from socket import error as SocketError
GPIO.setmode(GPIO.BCM)
GPIO.setup(17,GPIO.OUT)
#definitions
client = MPDClient()
client.connect('localhost', 6600)
# Poll the playstate and set GPIO.output accordingly
while True:
status=client.status()
if status['state']=='play':
GPIO.output(17,GPIO.HIGH)
else:
GPIO.output(17,GPIO.LOW)
print('next')
time.sleep(1) # Delay loop for 1 second.
client.disconnect()
Step 2: I used nano to create a service in the etc/systemd/system folder called statusled.service:
[Unit]
Description=Test
After=network.target
[Service]
ExecStartPre=/usr/bin/sh -c "sleep 20"
ExecStart=/usr/bin/python /root/statusled.py
TimeoutSec=0
Restart=on-failure
[Install]
WantedBy=multi-user.target
Step 3: I enabled the service by typing this into the command line:
systemctl enable statusled.service
Step 4: I rebooted the system using the RuneAudio web UI to do this.
Step 5: I tried playing and pausing to see what happens... and the light went on and off accordingly!
A big thank-you to all the experienced people who have posted their work here on the forum for us to learn from - and another big thank-you to all those who take time to help with our questions when we post them -- you're all champs!