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What is the difference between the SYSFAIL and FAIL LEDs on VXI Slot Controllers?

SYSFAIL is usually tied to the backplane SYSFAIL line, and indicates the state of this backplane line. It will be asserted at power-on by all devices in the system, and should go off when the devices pass their internal self-tests. If a device fails self-test, the line will remain asserted until the VXI Resource Manager runs and determines (from the card's Status register) which device failed. The Resource Manager will then attempt to put the device into a "safe" state by writing "SYSFAIL inhibit" and "Reset" to the device's Control register, which, if this succeeds, will put the device in the Reset state and turns off its SYSFAIL driver.

Failed is local to the individual device. It is turned on at power on and if it stays on it indicates that the device has failed to failed to pass its self-test. If the failed LED comes on during normal use it indicates that the device has failed (probably catastrophically). A bus error will NOT cause this LED to light, unless the bus error indicates a failure of the device (e.g., an access to an illegal address on the device will not cause Failed to light, but a failure to read a valid address might).