This has come up many times before, in various forms. Varying is if notifications happen only on reply, or also on edit/update, if they apply recursivly (that is, to decendents of the nodes being watched), and how notifications come in (via a * next to the node on the personal nodelet, via /msg from root, or via email).
A limited form of this is actualy already here. A user can subscribe /msgs for direct replies on all nodes belonging to them. This, however, is all-or-nothing, and only for nodes authored by the person attempting to watch them. This makes it of limited use.
I've actualy written code that implements more or less this. (Specificly, only direct replies, but for any node, and for any user, on a one-at-a-time basis.) It has remained unapplied, because it is belived that it would cause increased (db) server load. (I can find no purticular reason for this belief, in fact, it should reduce the new-reply path by one getNode call, IIRC.)
Warning: Unless otherwise stated, code is untested. Do not use without understanding. Code is posted in the hopes it is useful, but without warranty. All copyrights are relinquished into the public domain unless otherwise stated. I am not an angel. I am capable of error, and err on a fairly regular basis. If I made a mistake, please let me know (such as by replying to this node).