Facebook Chat is the third prong of communication on Facebook, adding to the already existing Wall and Message features. Unlike most IM clients, it is built directly into the web page and is not a separate application. This is really comparable to the chat feature that Gmail has had for awhile, except it is exclusive to Facebook and does not integrate with third party instant messaging services.
The chat feature is present on all of the Facebook pages and an IM window pops out when someone messages you. Conversation history is also integrated with Facebook Chat, but can be deleted if you choose to do so. Facebook has said that they are working on pulling other features of the site into Chat, such as having relevant mini-feed stories embedded into conversations.
While it is disappointing that Facebook Chat does not integrate with other IM services, it's a smart move for Facebook. This will draw on Facebook's huge user base and get a lot more people on their chat service. I wouldn't be surprised if people tend to spend more time on Facebook as a result of the introduction of this new feature. Users may tend to keep a Facebook window open just for the purpose of sending and receiving instant messages. Instant messaging is already an overcrowded market, but I think that Facebook Chat adds a decent amount of value to the site.
Unfortunately Facebook Chat has not yet rolled out in my network and I'm sure that a lot of you are in the same boat, but hopefully we will get to join the party soon. Who is seeing Facebook Chat live right now?