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Here is a picture of how the chat looks:
It even says "NAME says..." in the window title when the person you are chatting with types a message to you. If no one is on it will say "Nobody is available to chat" in the chat list.
If you visit the Presence Bar website, they have the chat bar right in it so you can test it.
It has a lot of features like the Gmail and Facebook style chat.
You can also set this up with your own database.
The best of all, it is only one line of ode and its very small code!
Hope this helps someone.