The yellow "sun-looking" indicator is actually supposed to be a universal representation of either brake drum configurations of the past or perhaps a caliper/rotor icon...either way, it is simply the mechanism that tells you that your pads are due for replacing.
The sensor "grounds" itself when it comes in contact with the rotor , thus setting off the light. Even on cold start mornings before you even apply the brakes, the light may come on (consider that your pads are ALWAYS in contact with the rotors anyway). During the rest of the trip, the light flickers rapidly depending on the vehicle speed as you apply the brakes.
Any other brake related issue will set off the
RED brake light indicator...low brake fluid, low brake pressure, or complete brake failure. This is a circle with a "B" in the middle. Again, it is red.
Unless you go shalom racing on weekends frequently, the pad wear indicator gives you PLENTY of time to address the issue. I went nearly two months under normal city/highway driving conditions (avg. 45 mi/day) before I pulled mine off...and they still had 30% of the meat left on the pads!
Before you go out and buy sensors, consider that most pad replacements kits already come with sensors included. Make sure you check with the parts guy at FastLane when you do. I am assuming you will purchase them here...you won't be dissapointed!
And W124s only have front pad wear sensors. You will have to inspect your rears visually to determine if they also need replacement. They don't take the brunt of the stopping force, so generally I find that they require replacement every other time I replace the fronts.