There are 2 things the lights indicate: battery status and charging status. It's easy to get the two confused.
When checking battery status by pressing the button on the back of the shuffle, green means >50%, amber >25%, red <%25. I'm guessing at these numbers but I've seen them posted elsewhere and from experience I agree with them.
When charging, the lights on both the back and the front will indicate charging status. In this case, amber means charging, green means full charge. I believe full charge is about 80%. If you leave it in for another hour or two, it trickle charges to 100%. While charging, you can press the battery button on the back to check the battery status (green/amber/red).
Sometimes you can't tell if the unit is charging or not because the light is blinking amber. If in Windows, eject the ipod in Windows Explorer by right clicking and the ipod's drive letter. The light will turn to solid amber and you can confirm that it is indeed charging. It'll turn green when fully charged.