Arduino Duemilanove

Does the Arduino Duemilanove have a watchdog timer to reset the outputs that are on in the case software looses connectivity

It can use a WDT, but it is dangerous.

Currently the WDT is not disabled in the bootloader code, so you may end up with a device that permanently resets itself. Uploading with the bootloader will fail. If you have a conventional programmer you can fix it easily though, but you’ve been warned.

a watchdog timer to reset the outputs that are on in the case software looses connectivity

You can do that with the watch dog but in essence it is just a timer that when it times out causes a special interrupt to occur. This interrupt has it’s own vector so you can arrange for anything to happen when it occurs.
In you main loop you have to “kick the dog” that is keep resetting the timer. The problem occurs if you accidentally (or deliberately) set the time to be too short so there is no time to up load a new program before the dog barks. You could then only recover the chip by doing a chip erase with a programmer and re burning the boot loader.

I’m planning on having the watchdog timer set to about 250 ms. Would that be ok or would it need to be a second or more

Too short you would never be able to use the boot loader to load a program in again.

I think the delay looking for response is about 3 seconds but do check on that.