As reported on TechCrunch earlier this week, Facebook is working on a chat functionality. They held a press conference today and TechCrunch recorded this exclusive video demo of Facebook Chat. The presenter in the video is Peter Deng, the product manager for Facebook Chat, who made it clear that this is a preliminary version of the product. Facebook Chat appears to be something that available when you are on Facebook with the ability to turn it on and off.
Caroline McCarthy also offered some additional Facebook IM details in her report on The Social which offered the photo below.
Photo Credit: Caroline McCarthy of The Social