Nowadays we use Operations Manager to monitor the servers and it will send out all kinds of email & IM's when a server goes offline. We also have Idera's Diagnostic Manager that can do the same thing.
Prior to spending all that money however, I used to set up a server with email and then had all the other servers do event forwarding to that server. When errors occurred, they were forwarded to the central machine, which had Operators and Alerts set up to respond to the events as they came in. It's a part of the SQL Server Agent.
It's not as sophisticated or as powerful as the third party tools available, but it can do most of what you need.