PropertyChanged event testing: is this a good way?

I believe it’s a good idea to unit test the PropertyChanged event in the example you have shown. You might have written the property name string wrong which would result in a missing update.

With the WPF Application Framework (WAF) it’s very easy to write such a unit test:

Person person = new Person();
AssertHelper.PropertyChangedEvent(person, x => x.Name, () => person.Name = "Luke");

I use a little Fluent API for doing exactly that. It allows you to write tests like this:

var imageViewModel = TestHelper.GetTestImageViewModel();
imageViewModel.ShouldNotifyOn(s => s.EditModeEnabled)
    When(s => s.Mode = true);

Besides being succinct, I prefer this approach because it's type-safe - no string values to keep in sync with your API.

To test that the event is being raised for more than one property, you can just write another test that does this. This will give you many tests, but each will be very small and you avoid Assertion Roulette.