I remember reading about this. It would really help if Git supported inotify; there is no reason to stat every file on git status/diff/etc. I remember a mailing list thread about this in the past, but I don't think it ever got off the ground. I know there was a lot of discussion on how to support the feature cross-platform.

On a slightly unrelated tangent, the tup build system supports inotify, which I appreciate.