The performance demands imposed on sensor networks carrying heterogeneous connections are challenging and can be satisfied via the deployment of highly dynamic statistical multiplexing protocols which honor the traffic Quality Of Service (QOS), while utilizing the network resources efficiently. While the successful design of high-performance traffic multiplexing protocols requires accurate modeling of traffic statistical characteristics and QOS, variations in the latter characteristics, topological network changes (some due to mobility and short sensor life time), and/or failures in the response of network components affect directly, and frequently dramatically, their performance characteristics. It is thus crucial that traffic and network performance monitoring techniques be deployed, first for the identification of traffic changes and network failures, and then for the subsequent adaptation of the protocol operations, the pertinent recovery of failures, and the appropriate reconfiguration of network topologies. In this paper, we describe an approach to the design and deployment of a distributed performance monitoring system.