With a sabretooth only 1 LED should be lit in normal operations (the blue one). Red one only comes on if there is a problem.

As for the binding issue, here is how you should do it:

1: Put bind plug in the Batt/bind slot on your RX
2: plug a receiver pack (or some other 4.8-6v power source) into any other socket. Make sure the polarity matches the little symbols on the RX's case. It should be flashing its amber LED.
3: On the TX, pull the switch marked 'Trainer' towards you and hold it there. Turn on the TX; all the power lights should light up and flash.
4: The amber light on the receiver should blink slowly, go out, then go solidly on. Release the trainer switch. Job done.

If it does not work, then your receiver is probably knackerd.