Here's my two cents on this subject. I agree that the flashing eyes is for communication of some kind. During the fight between the berserker and the P1s in Predators, berserker couldn't see P1s when he was cloaked, so the eye flash could be to let each other know where they are during the hunt. As for how they actually see... There's some problems here. In P1, his bio showed thermal imaging, but when he took his mask off, his actual vision was way on the Infrared side of the spectrum as apposed to the ultraviolet. Now, in P2, the pred could still see in thermal imaging after he had his bio removed. You can see that they fixed this in Predators when berserker took his bio off. Anyways...If the preds evolved to see in the infrared, then they would be able to interpret what they see. If a human looks at something in the infrared, we would not be able to interpret the data in the same way, so maybe they can see the readout on their gauntlets and other tech just fine.
Quick question. Any time it's shown a pred computer console or anything like that (Bomb gauntlet, inside the ship in AVP and AVP:R), all the readouts have been in red, right?
Just my thoughts on the subject...