LED to indicate Arduino is running

[max_torque]

As mentioned, and AC coupled charge pump circuit is a low component count solution, and if you "set" the output port in one critical function and "unset" it in another it also validates that both those functions are being called and running appropriately!

(ie, do a software bitbang port drive, not using a hardware periferal like PWM etc, and don't toggle the port but set and unset it seperately)

[SL4P]

My (last) word...   I'd forego the added hardware - but carefully plan & test a software solution (perhaps patched WDT).  Nothing extra to fail, and the chip already has everything you want - it just needs to be corralled into a solution for your requirements.

[Seekonk]

A little programming error led me to this little trick.  I was driving a FET and it stayed on long after it was supposed to turn off in the program.  I looked for a logic error and couldn't find one.  What I had done was forget to declare that pin as an output.  After it wrote a one to that pin, that pin returned to being a floating input.  FET gate capacitance kept the FET on till the charge drained off.  I figure that trick has to be useful some day.