Grep,
There are some gray areas though that make this not totally absolute. For instance, if I call and make an appointment with my doctor during my break time, can my employer listen in on that call? As long as it is not a long distance call, every place I have worked for has allowed this as an acceptable use of company resources. I can imagine scenarios built on that where secretly monitoring all telephone calls could get the employer into trouble.
The point is that employment is not indentured servitude or slavery and it is very easy to create a situation where an employee might legitimately have an expectation of privacy even on those machines. Going back to the health care situation for a second. When I started at working for a very very large computer company as part of the hiring process I had to fill out some confidential health insurance information through a secure web form. I had every reason to expect that interaction to be confidential as carried out on the company computer. It isn't as cut-and-dried as you would like it to be.
So monitor if you want, but inform your employees. They might reasonably have an expectation of privacy, but you can 100% remove that by telling them you are watching.