I am using MRTG for bandwidth statistics, and two low-cost monitoring tools, WhatsUp by IPSwitch, and Kiwi Syslog Deamon. All three are running on a cheaper Dell PowerEdge 650.
Using What'sUp, you can Ping poll the interface of distant devices, as well as watch from specific services on servers like SMTP, HTTP, WINS, etc. You can also using alternate polling methods like telnet for devices that do not answer ICMP requests. I also set it to notify me via email to my cell phone if anything misses 4 consecurive polls. Obviously this would not work if it's the mail server or internet connection is down, but it does have the ability to dial out and send TAP messages, or if a Voice Modem is installed, it can call a number and play a prerecorded message. All alerts can be defined on a per device basis.
Using KIWI, I can slip the Syslog messages of choice (what type, level, etc) into my SQL database for reporting, internet usage, etc.