If a creature is flying (magically or otherwise) and is suddenly subject to the 'blinded' condidtion - such as from power word blind - what happens?
As KRyan said, nothing miraculous happens, the blinded conditions applies as normal. However, it is worth noting this line in the condition.
Blind creatures must make a DC 10 Acrobatics skill check to move faster than half speed.
Which means it can only fly at half speed unless it makes an acrobatics check.
This potentially ties in with the fly skill.
Flying Maneuver | Fly DC
Move less than half speed and remain flying | 10
This means that if a winged creature gets capped half speed and doesn't move the full distance they need to make a DC 10 check to see if they fall.
It flies... blindly?
I’m not really sure what else you might expect here. But since you ask, that’s it. Nothing special happens. The creature is blind, everything in the blinded condition applies to that creature, and all the regular rules about flying, e.g. from the Fly skill, also continue to apply, normally.
As william porter’s answer points out, one of the things being blind does is reduce your speed. One of the things you usually need to do while flying is maintain your speed. This interaction can cause blindness to indirectly lead to falling damage if you fail the appropriate checks; see his answer for details.
There are also, as Ifusaso points out, some rules for crashing into objects, which is a lot more likely to happen if you are blind (but don’t actually change because of the blindness):
If you are using wings to fly and you collide with an object equal to your size or larger, you must immediately make a DC 25 Fly check to avoid plummeting to the ground, taking the appropriate falling damage.
Note, however, that if the thing you collide with was the ground, you fall 0 feet and take no falling damage.