I humbly present my current solution: Grid, by Pastamancer (KoL FTW!). As the name suggests, it lays out in a grid everyone in your raid. It's incredibly configurable, but I've stuck pretty close to the default (I did make it bigger; it starts out very tiny indeed). The entire background of the box is the character's health bar, colored according to class, and in the foreground it shows the first 4 (by default) letters of the character's name. When someone dips below a preset health threshold, it shows the health deficit -- for instance, the bottom-left warrior in the screenshot is 1.6k health down. This makes picking an appropriate heal a snap. Debuffs are also shown by icons, and the corners of a character's square can be set to display various things (I have it set to show debuffs I can't cure, as well as HoTs). Finally, and this is unbelievably helpful, if a character is low on health, their square is highlighted (as is your target's square) with a white border.
I realize this may sound a little complicated, so I photoshopped up a diagram:
Anyway, as I said, it's very, very configurable, but that is more or less the default, if I recall correctly, and it works very well for me. I'm currently combining it with the X-Perl main tank frames and the CT_RA emergency monitor for a fairly comprehensive raid-people-monitoring solution. I do still use the CT_RA frames for buffing though.
Oh, one last thing -- someone called Shadmar has written a plugin for Grid called GridStatusHots that shows the status of your own HoTs on the Grid. Helpful, since I believe Grid otherwise doesn't distinguish between your HoTs and other people's, and HoT stacking on tanks is sexy.
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P.S. Happy new year, people who live east of PST!