I prefer the "Rice Crispies" method:
1. If it goes SNAP, when you are installing the giant oversized heatsink to run it 500 MHz out of spec, you killed your CPU.
2. If it goes CRACKLE, when you mercilessly increase the voltage, because you are pissed that your 1GHz CPU won't QUITE do 1.5GHz, this is also a sign that he is on his way out.
3. If it goes POP, and a thick black vapor starts coming out of it, you guessed it, it is probably dead.
If the "Rice Crispies" method doesn't work for you, look for black dots on the bottom, system not booting up when the chip is installed on multiple motherboards, obvious visible cracks in the middle of the core, fire coming out of sides or back of your case, and of course, the ever present smoke.
If the above applies to you, don't dispair. Congratulations on your very cool $150 keychain!
Of course, if NONE of this does it for you, you can always revert back to the always popular "it doesn't work now" method.
Nack