I think it can work both for and against you sometimes.
I checked your site before I ordered an item a few weeks ago and because it was not listed I knew immediately that it was not in stock although I had previously seen that item on your web site.
I proceeded to place an order with another supplier and the goods were promptly delivered.
The very next day you had my item in stock again.
On the same note I have had a "notify me" selected with a supplier for an item for over 6 weeks without a reply or the item coming back into stock.
I feel if you have a "notify me" button then it should include an advice with an approximate time that the item will be back in stock.
Just my thoughts though.....