http://blogs.msdn.com/b/kwill/archive/2013/02/28/heartbeats-recovery-and-the-load-balancer.aspx describes the health of a role instance, what Azure does for recovery, and how to use a load balancer probe.
When you say that your instance doesn't respond, does that mean that the instance shows as Busy (or something besides Ready) in the portal, or just that IIS isn't responding to requests? If the former (instance showing Busy) then you don't need a load balancer probe since Azure will automatically remove that instance from rotation. If the latter (IIS not responding) then you can potentially implement a StatusCheck event in your web code such that if w3wp itself is having a problem then the instance will be taken out of rotation by the fabric, but if w3wp itself is healthy and it is just the requests that are not responding then you will need the load balancer probe.
Having a good monitoring and recovery solution in place is very valuable, but I would recommend that instead of rebooting instances to mitigate a w3wp problem you should instead investigate the root cause of why your instances aren't responding. Fix the source of the problem rather than apply a Band-Aid :). The blog post at http://blogs.msdn.com/b/kwill/archive/2013/02/28/heartbeats-recovery-and-the-load-balancer.aspx, and in particular the troubleshooting scenario 5, may be a good place to start the investigation.