when switch S1 is depressed it shorts the supply voltage to the base of Q2, turning Q2 on. The collector of Q2 starts to pass current, charging up C3. This pulls the base of Q3 low, thus providing voltage to the base of Q2, so when the switch is unpressed, Q3 keeps Q2 on. This is a transistor latch circuit.
When an audio input comes along, the collector of Q1 wiggles, this puts a voltage on the emitter of Q2, reverse biassing the base-emitter junction of Q2, switching it off, so the light goes out
Simon