I’ve been using a simple, free uptime monitoring service called Uptime Robot lately to monitor a few of my sites. It will check up to 50 sites every 5 minutes to determine if they are online or offline, log any downtime events, and optionally notify you when your sites are down, all for free.
I wrote a quick WordPress plugin which creates a dashboard widget with your most recent Uptime Robot log entries. You can either monitor your entire account, or a single site. Just add the correct API key to the settings page.
You can download Uptime Robot for WordPress from the official plugin directory or through your WordPress Admin.