Until Apple releases "iChat Mobile," developers will compete to produce the IM solution for the iPhone. So far, we've considered JiveTalk and Meebo. The former was definitely better than the latter, but neither was perfect. Today, we're looking at FlickIM.
FlickIM supports AIM only, which is a drawback (JiveTalk allows simultaneous connections to AIM, MSN, Yahoo!, GoogleTalk, ICQ, and Jabber), but has the nicest UI of the three. Simple "chat balloon" icons keep tabs on multiple conversations, and your contact list is displayed as a dial selection tool.
I did notice one oddity: After I thought I had logged out, iChat on my Mac complained that I was logged in at two locations.
Again, it's not perfect, but it's still nice.