Gaston Milano wrote a very nice WinForms app that will show you the output of an MSBuild process. This tool will also allow you to customize several aspects of your build.
Unfortunately it is linked against the 2.0 version of MSBuild, so it still can't handle 3.5 project files and solutions. Lets try and encourage Gaston to make a 3.5 compatible build ;)

A Better Way To Show your Build Output: BuildConsole.NET - Gaston Milano's WebLog