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: 
[PostRemoteLog](http://www.oriontransfer.co.nz/projects/admin-toolbox/post-remote-log/index) (free)
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PostRemoteLog has Growl notifications support and it is free.
OS X has a Tail utility built right in. 

Open a Terminal window, and the format would be 
`tail -f filename.log`

The -f option would make sure to keep displaying new entries to the file as it's written to.

Of course, this is the basic Unix tail utility, so there aren't coloring options and the like... however you can open multiple terminal windows / tabs to monitor different log files as needed.