asterisk users - Nov 2009 - Extension in use

There are a couple of ways you could see that, 

One would be by having a service .NET connected to the manager interface
and watching for activity on the phone, this way you could tell if the
phone is busy or not. 

[If phone has more than one line then set call-limit=1]

Is this for routing purposes or just for display? 

The other thing you could use is Jabber. 

Look for OpenFire integration with asterisk and you'll see what I mean
[google]