1984grandnat, the "scantool" Dave is referring to is one of several aftermarket tools that reads your ECM while driving! Many factors are involved, but normally these are able to display voltages/values of some or all the sensors, and the amount in degrees the ECM is retarding ignition due to knock (among other things!) A good scantool is a must to fine-tune these cars!
What YOU are referring to is using the SES light to obtain trouble codes stored in the ECM, which is also very useful to know! And since you brought up the "paper-clip" trick, many people don't know about the "field service mode" using the same paper-clip trick!
Basically, the SES light is used to "read" 02 sensor voltage! (approximately, anyway) To do this, you simply START the engine with the paper clip "installed"! The SES light will react these ways:
1) Flashes 2.5 times per second--this indicates the ECM is in OPEN loop;
2) Flashes ONCE per second--this indicates the ECM is in CLOSED loop, and the 02 voltage is between .35 and .55 volts
3) it will stay OFF most of the time--this indicates the 02 is less than .35 volts, or LEAN
4) it will stay ON most of the time--this indicates the 02 is more than .55 volts, or RICH
Normal conditions are: light staying ON a long time under acceleration, light staying OFF a long time during deceleration, light BLINKING most of the time while cruising, and light staying ON a long time while idling.
Maybe this will be of help to someone!