Pingdom doesn't provide our full range of alerting features, such as phone alerts, on-call scheduling, and two-way SMS (so you can hand off problems to other engineers straight from your phone).
Actually, Pingdom is one of the most common services used in conjunction with PagerDuty.
At a higher level, what we're trying to provide is an on-call management and alert dispatching tool. What PagerDuty does is let you control who, how, and when people are notified when problems occur. In contrast, monitoring tools like Pingdom and Nagios focus more on detecting problems. While they have some native alerting functionality, we think with PagerDuty's advanced alerting, they can function all the better.
