Ah, the fond(ish) memories of sleeping one hour on, one hour off in a two man fighting position. You run into a lot of issues pulling guard duty overnight, though as has been stated, the more people you have the easier it gets. The biggest issue is time keeping, followed closely by noise and light discipline. If you have a fire, then noise and light discipline aren't nearly as much of a concern, but that still leaves you with time. Most of the time I'm doing Ranger stuff in the woods, I'm alone, so I can't really set a watch. What I can, and so, is set up early warning devices in the most likely avenues of approach, set high enough off the ground that the smaller woodland creatures won't trigger them. That and sleeping really lightly gives me a pretty safe sleeping experience. The fact that I live in the south means that I don't really have to be near my fire for warmth, so I tend to be back from the circle of the light, which is where most curious parties would be investigating anyway (and thereby silhouetting themselves nicely in the firelight).
"Some Thoughts on Scouts and Spies" by Gerry Barker had a section on keeping guard. I'll have to dig my copy out and reference it. I believe it talked about having everyone sleeping in a circle with their heads by a tree in the center, and their feet facing out, which would facilitate a very quick and quiet change over of the guard in the night.
The only thing necessary for the triumph of evil is for good men to do nothing.