There are some very good paid instant messaging apps for the App Store, and plenty of free options too. Meebo is the first that manages to be both, with almost no compromise.
Meebo was one of the first companies out of the gates with an instant message web app for the iPhone, so it's weird that it took them this long to go native. But hey, whatever, they did, and it's goddamn fantastic.
In short, Meebo does everything I need from a chat client, does it well, and does it for free. My only hangups? There's no Skype messaging support, and-though I haven't-some iPhone 3G users are experiencing crashes during regular use. But! (And I can't say this enough!) It's free. Just give it a try. Even if you've already paid for a Trillian or a BeeJive, you might find something you like here.
From the App Developers: Meebo is integrated, all-in-one instant messaging that connects you with your friends everywhere. Meebo has been the leading platform for multi-protocol IM on the web since 2005. With that knowledge and experience, we optimized Meebo on the iPhone for speed, simplicity, and performance.