I have been working (along with my sister and cousin) on an XMPP based IM client. This is fully implemented in DotNet. The current version (1.0.1) can connect to Google Talk. The project is hosted here.
You can get the latest code from the following SVN url: https://chatapp.googlecode.com/svn/trunk/
Here are some screen shots of the application:
And the Chat Window
The 'About Box' describes the different components that we are using.
I would appreciate your valuable comments - please post them here.