I've been using xboxfriends.com for a long while to track who's playing what on Xbox Live. A Digg Artical's comments lead me to XBList. It doesn't have the external notification system but the interface is a lot better and it looks like it's been updated in the recent past. It's also programmed in the .Net framework and scraps xbox.com to get your friends list, but reflector works on it unlike Xbox Friends. One downside is it looks like it assumes you already have logged into xbox.com and will not do that for you.
Link to XBList - XBox Live Friends List Manager | BRH.numbera.com