I believe the ECT sensor is an inverse resistor; as it heats up, it's resistance drops. Theoretically, there are only two possible problems. The first is that the sensor gets gunked up or corroded; I believe that this will only slow the sensor's function, or change it's values (ie, make it report it colder or hotter than the engine actually is; both are possible). Second, the wires can become corroded or the sensor disconnected. If the engine doesn't see the sensor, it defaults to the lowest temperature (I believe -70F), which means the engine runs really rich.
There are set values for the resistance at certain temperatures. The table is in both Haynes and Chilton; if you don't have the manuals, I can scan it for you.
Edit: What the heck, here's the table. If you want to check to see if it's working, just dunk the thing in water at a certain degree and measure it's resistance. You can consider it ok if the numbers are similar.