I’ve got a big post half-written at the moment, but I’ll interrupt that to make a quick website recommendation:
WoW Character Watch, a website developed and offered by Alinden of Moar HP Than Jesus, provides a handy service for anyone interested in keeping track of their friends, enemies, and anyone else. (The tagline is “We watch so you don’t have to.”)
Sign up at the site and you can create a Watch List; every 24 hours, WCW checks the Armory for changes to characters on your watch list. It reports changes in gear, skill levels, character level and guild. Keep track of your friends’ progress; keep an eye on that troublemaker ex-guildie!
Just a note; it’s currently in beta so there may be a few kinks. A contact form will be up within 24 hours; in the meantime, if you have any problems, head over to Alinden’s blog and report them there.
Also note that I believe it’s limited to the US Armory at present, although EU functionality will be added shortly.
Edit: The Armory may be blocking it at present; a few people have reported issues with not being able to look up their characters. If you suffer that, leave a comment here and I’ll make sure the dev sees it.
Edit 2: It should now be working fine again, and EU support has been added.