I'm still trying this out, but I've been impressed so far and thought I'd share. It's an open source program that you can either run on their server (web app) or download the source and run on your own server (linux I believe - written in Ruby on Rails I think) It does just about everything you could want; stopwatch feature, email notices for updates when you work on a project, assign users (unlimited as far as I know), timelines, reports, timesheets, even gantt charts! And being open source, its FREE! I'm amazed by it so far and I haven't even touched some of the features.

Oh yea, here's the link, almost forgot. ClockingIT