I would definitely recommend sticking with Phantom mode, it's just easier. There should have been a card attached to your RC which explains the light blink patterns. When you first turn the Phantom on (also turn on the RC right away) the rear LEDs should be blinking yellow. after some time (anywhere from a few seconds to a minute or two) they should blink rapidly green... this indicates the Phantom has established a GPS "home point". if your phantom loses touch with the controller or goes into failsafe mode (for example battery too low) it will attempt to fly back to that home point and land.
As you fly, the green lights on the phantom will blink, that's normal. the first battery warning (default 30%) will cause those lights to go red. at that point basically head home, land, swap battery whatever. If you keep flying and reach critical battery level (default 15%) the lights will all begin flashing red rapidly and the phantom will enter failsafe and land itself.
You can also configure the right switch on the remote to trigger failsafe using the Phantom Assistant software. This can be handy if you get really far away or for a variety of reasons and you just want it to fly back to the home point itself. If Failsafe is triggered via the remote (switch or lose signal ie batteries die or RC is turned off) the normally green lights on the phantom will blink rapid yellow. note: if you're triggering failsafe via the switch you can flip the switch back up and regain control at any time and the LEDs will turn green again.
I use failsafe all the time when I want it to fly itself back overhead or descend on it's own for a bit. The newer firmware limits descent to 2 meters/sec... so if you're up at 150, 200 or more meters that can be quite a while of just boring *** descending so I let failsafe do that for me sometimes.
keep in mind now that pushing your flight time into low battery levels is very dangerous if you're up high and loaded with a gopro, etc. with the 2m/s limited descent you could theoretically run out of battery before you can land. basically my advise is get multiple batteries and be conservative. better to land, swap batteries, go home and charge than try to push a few more minutes of high flight and crash the thing
happy flying! oh and another piece of valuable advice most newbies get wrong: don't try to take off "gently". if you slowly raise the throttle trying to take off gently most times you'll have a tipover and break a prop or something. When you're ready to take off give it full throttle take off authoritatively and then back off and hover at a comfortable altitude (1-2m)