There are a few online services that help with that, like WeRead.com, which will recommend books based on the ones you list as being read. When the new George R.R. Martin books came out, it suggested I pick them up because I already had the rest of his series marked.
As for a service that notifies you with an email or text or somesuch, I haven't seen one, but I'm sure some web developer somewhere may like hearing that as a suggestion... hmmm... maybe I'll bug Mark Coker at Smashwords, not like he doesn't have enough on the go already...
