I used Palringo, and wasn't that impressed. It kept losing the connection, and didn't use the BB's LED or sound settings. I keep my BB on vibrate all the time because I have 2 small kids and don't want it making loud noises if I'm checking on them when they are asleep (I'm compulsive about carrying the phone with me). I couldn't stand the fact that Palringo would chirp every time a new message came in. I am thinking of trying Nimbuzz now, but would love to know if others have identified free FB-compatible IM/chat clients.
I've been using Beejive (version 1.1.2) for facebook chat. It works great and seems to sign me out properly -- something that was lacking in other clients I've tried.