New Chat Module?

You can run XMPP on a shared host, but it depends on how far you want to scale. If you are looking at a small user base then you should be fine, but you must keep in mind that you are creating a serious single point of failure within your site. Sometimes taking the easy way out on a project will cost you a lot more later, so just keep that in mind when doing this.

I personally don't like chat room because you get no added benefit from it. You force users to use your site as their chatting mechanism and on top of that the solution solves a niche problem. The XMPP framework is a means to facilitate XMPP communications through a site. It just so happens that the module ships with a client and a bunch of other things. My understanding of the project and from experience working with it is that it just enables your site to speak in XMPP. This gives you the opportunity to develop what you want without the need to worry about integrating the XMPP specification into your site.

I would also agree that you are right in that people want easy. Solutions like Google Talk and Facebook just look so simple don't they? The reality is that in most cases they are pretty simple, but they require you to do some research and things on your own. Don't confuse wanting easy with just being lazy because I am sure a lot of those users looking for the patch solution are just not willing to put in the time. Is that a bad thing? Of course not. Some people want an out of the box solution, but again, I urge you to put some thought into what it is you want your site to gain from this.

You are correct in that chatting is a simple idea, but the issues always arise when implementing that simple idea into your environment with your requirements. As for XMPP going over HTML, there is already a solution for that. There are a couple libraries out there to do it and do some reading into BOSH. The beauty of XMPP is the openness of the protocol and chatting in general. If properly done your site could allow users to log in with their Google account, Yahoo or any other chatting mechanism because XMPP supports federation. Users could have their presence integrated into Drupal and have the ability to transfer files, use private chatting and group rooms among many other things.

I understand not everyone is a developer and you may not be one yourself, but you can't be ignorant to solutions that are already out there. Though they may look simple, they take work and understanding to make them great. Instant gratification is fine and if you want that then go with a crap solution, but keep in mind your users will get used to whatever you put in place. Any change may disrupt or anger them even when it is for the better. So I guess what I am getting at is do it right the first time and think about what you want. Not trying to come off harsh, but hopefully that provides some more insight into your problem.