I’ve written a framework that represents my explorations in this question called ReactiveUI
It implements both an Observable ICommand, as well as ViewModel objects who signal changes via an IObservable, as well as the ability to “assign” an IObservable to a property, who will then fire INotifyPropertyChange whenever its IObservable changes. It also encapsulates a lot of common patterns, like having an ICommand who runs a Task in the background, then marshalls the result back to the UI.
I have absolutely zero documentation up right now, but I’ll be working on adding that information over the coming days, as well as a sample application I’ve coded up
UPDATE: I now have quite a lot of documentation up, check out http://www.reactiveui.net