are you administrator on TD? What you are describing is a workflow and yes these can be set up to do what you have stated with a bit of work. From memory this is covered in the administrators manual (not sure which version you are on so cannot advise much further).
Agile Testers of the World UNIT!
If you are looking for Email notification to the person who created the defect whenever the defect status changes, you can use the Email Configuration feature of the TD.
In the Site Administratorís Projects tab, enable the mail configuration for a project by selecting the 'E-mail defects automatically' check box. Note that this check box must be selected for your mail configuration to work.
Then use 'Configure Mail' link in TD Admin to set to the email notification.