Altough true that windows does have a system file named watchdog, here is the info on a monitoring program by the same name of Watchdog:
WatchDog is the ultimate application to monitor, control and restrict the time users spend on a computer. WatchDog's security features block out unauthorized access. This software can restrict how long and when a user may log in, the applications can be run, monitor URLs and keyboard input and take screen shots periodically. WatchDog uses Windows policy integration to enable many advanced security features that can vary for each user.
Parents can use WatchDog to restrict how much their children use the computer, when they use the computer, and what they do on the computer. Parents can also check what their children are doing on the web and what programs are being used.
Libraries can restrict how long people can use their computers, not letting patrons hog the machines. They can also monitor what sites are being visited.
Schools can set time limits on how long the students use the computer, monitor what they do and where they go on the web. WatchDog can also restrict what they do in Windows.
Cyber Cafés can use WatchDog to charge people for using their computers, or limit how long they use their machines. Free support is given to any cyber café who wants to start making money on their machines.
Businesses use WatchDog to add security to their machines and monitor employee's activities.