I use Yahoo IM - both for personal use and for contract work I've done for a company in another state. No problems for me. It does the job. My only word of caution is that Yahoo works best if the other user also has a Yahoo account. If you try to go outside Yahoo (i.e. communicate with someone with MSN messenger) you can make it work but it's buggy and the communication drops sometimes. So really, it depends who you're working with.
Also, I wouldn't recommend it for video chat/conferencing. There are far better tools for that.