We introduce Hermes, a lightweight smart shoe and its supporting infrastructure aimed at extending gait and instability analysis and human instability/balance monitoring outside of a laboratory environment. We aimed to create a scientific tool capable of high-level measures, by combining embedded sensing, signal processing and modeling techniques. Hermes monitors walking behavior and uses an instability assessment model to generate quantitative value with episodes of activity identified by physician, researchers or investigators as important. The underlying instability assessment model incorporates variability and correlation of features extracted during ambulation that have been identified by geriatric motion study experts as precursor to instability, balance abnormality and possible fall risk. Hermes provides a mobile, affordable and long-term instability analysis and detection system that is customizable to individual users, and is context-aware, with the capability of being guided by experts. Our experiments demonstrate the feasibility of our model and the complimentary role our system can play by providing long-term monitoring of patients outside a hospital or clinical setting at a reduced cost, with greater user convenience, compliance and inference capabilities that meet the physician's or investigator's needs.