Instant Messaging Software doesn't really replace "chat", but is rather an extension of your communication abilities

The two programs I am most familiar with are MSN Messenger Service and ICQ (pronounced "I Seek You"). There are many others - including one promoted by AOL, the AOL Instant Messenger (AIM)

In GENERAL, Instant Messaging Software...

• Has a contact list - people on the same service who you have added to your instant messaging software.
• Works best with others on the same service.  For example, to send a file (picture, document, etc) quickly using ICQ, the recipient also needs to have an ICQ account.
• Allows you to send brief messages, files, URLs (world wide web links) to others you have added to your contact list.
• Is not automatically censored or virus protected (but you can often block users, use your own virus protection software to scan files, etc)
• Allows multiple accounts on the same computer, however only one account of any single instant messaging software may be open at one time.  For example, if you share a computer, each of you may have an individual msn Messenger account, but you can only use one at a time.
• Is Free :-)

The positives about Instant Messaging Services:

• Allow you to stay in contact with friends, even if they use a different chat room (or don't chat at all)
• The absolute best way for the average user to transfer files over the Internet (*much* better than e-mail, especially for larger files)
• You can stay in control of your shared personal information, individually agree to be placed on someone else's contact list (depending on service & configuration) and block individual people's messages or from knowing you're on-line
• Constantly improved services from the leading Instant Messaging Services enable features like computer-to-telephone/computer free voice chat, private chats, pager notifications and more. Note:  you don't *have* to use these advanced features to benefit from the basic services.
• Useful for business purposes too - in the same office or different geographic locations.