Yeah, it's after Halloween, but figured i'd weigh on this nonetheless...
I'd say the original concept of Floyd was that the eyes were sunglasses. Then when it came time to rebuild the puppet for season two, they basically borrowed a page for the "Mahna Mahna" handbook, and gave him "blinking sunglasses"...yeah, obviously there's no such thing in real life, but then again, neither are sunglasses like Dr. Teeth's where they basically raise up and down like they were actual eyelids! Course, the illusion is kind of kept with those nice big bushy eyebrows of Floyd's, so we associate them as just full enough that they came cover his sunglasses (again not a reallife possibility, but it's an artistic liscence)
I love the expression Floyd gets out of those eyes, Jerry Nelson was awesome at taking advantage of the eye mechanism and just closing them a little bit to add expression instead of just full-close and full-open. Unfortunately, around the 90's, the puppet builders never seemed to be able to get the eye design on Floyd right and he hasn't quite liked good since.