Question: I am looking for a visual tail tool that can monitor several local or remote log files.

Optional features that interest me: color highlight based on log error level, coloring for special words, filtering of messages and/or notifications on new activity.

Answer: 
I found a tool that can do this [GeekTool](http://projects.tynsoe.org/en/geektool/), it even has a version that works on Lion (see the forum).

It can be used to do just simple tails, without filtering or other stuff, so maybe someone has a better alternative.
While I haven't used it myself yet, I recently discovered [Log.io](http://logio.org/). It appears to meet all your criteria.