While we participate in LRC Live, we do not have a localized chat service here at JSRCC. As much as we would like one, the reality of the matter is that we just do not have the staff to really commit the time. One of my projects this summer is to play around with LRC Live's qwidget and hopefully get that up and running.
If we did have the staff resources, I would go with Library H3lp. Unlike some of the free standalone services, this allows multiple librarians to be logged-in and allows the ability to pass questions to another user, as well as a fine-tuned librarian interface. I haven't kept up with the project recently, but I believe they now have a way of accepting text messages to the chat interface as well.
I believe that, if at all possible, libraries should offer a basic chat service that would ideally accept IMs from multiple platforms, including text messaging and Facebook. Increasingly, students prefer not make voice calls or even use email - they want the instant gratification that comes with a text or a chat.
While I was a graduate assistant in the History, Philosophy and Newspaper Library at UIUC, we rolled out a chat reference with limited hours. It wasn't terribly popular (but then, our library patrons were generally graduate students and more willing to just come into the library). Most of the questions we got were "what are your hours?" and "do you have this book?" The few actual reference questions we received we encouraged the patron to come into the library so we could discuss this further. In most cases, those patrons would not have initiated contact at all, so the chat started off as a question in a space they felt comfortable, and we were able to bring them over to where we as librarians felt comfortable.
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