XMPP servers allow you to message users on other IM networks (such as AIM, MSN, ICQ and Yahoo) using Service Transports. This will allow you to use any XMPP-enabled IM client (such as iChat) to talk to people from any IM network you choose! As far as I know, this only works for text chat, not audio/video chat or file transfers.
Step 1 - Setup your XMPP account
Use the Panel to set-up a XMPP account on Dreamhost
Step 2 - Download a XMPP client
Now you need to download a XMPP client to connect with. I personally recommend Psi which is open-source, cross-platform and very feature rich (UI design may not be it's strong point). Install your client of choice and follow the instructions to connect with your XMPP account.
Note to iChat users - iChat will allow you to connect to XMPP and chat with people, but it doesn't do the Service Discovery needed to set-up the transport link to another IM network. At this point it would be best to follow the rest of the instructions using a client like Psi. Once you have set-up the XMPP transport and connected with friends you can then go back to using iChat and set-up the XMPP account in there.
The same applies to Pidgin/Gaim, which can use transport services once they have been registered, but cannot be used to register any new services.
Step 3 - Service Discovery **** Unfortunately, this step does not work on DreamHost, due to compatibility with the Jabber daemon we use *****
Once you have set-up the XMPP account you will need to discover the Service Transports. This next step depends on the client you are using, but you will need to find it's Service Discovery menu (in Psi, this is in the General Menu). In the Services list you should see options such as AIM, ICQ and MSN. Select the transport you require and click connect. You will now be asked for your log-in details for this network.
Step 4 - Add Friends
If you already had friends on the network you have added, they should automatically add to your XMPP friends list, with a strange format. For example, MSN friends will have addresses like bob%hotmail.com@msn. Adding friends can be done using a format such as this.