Lifehacker mentioned the computer usage tracking software RescueTime almost a year ago, but I didn't try RescueTime until now. [Note: The Lifehacker post is a little old so I recommend visiting the RescueTime website to see the current features.]
As long as you're not too worried about privacy or installing yet another application on your hard drive, RescueTime seems like a nice piece of software. It tracks what applications and web sites you're visiting, then transmit that information to a central data server where you can log in and see how you actually spend your time. It's sobering to see that you thought you did six hours of work, but actually only three. Of course, this doesn't work very well for off-computer time like updating my research notebooks.
In my first week of usage, RescueTime seems like a killer app and I recommend it. I'd like to write a more detailed post on RescueTime at some point (maybe a few weeks or months from now?)