I used Jabber with the Pidgin client, my impression was also it was mostly developers and open source enthusiasts. Most people I knew who were not of those circles used commercial things like ICQ, MSN Messenger, AIM, etc. Frequently Jabber/XMPP enthusiasts had to use clients that supported it as well as some form of gateway to the other clients. Trillian was a popular multi-protocol client.
Yeah, the echo reply from my WiFi router comes in <1ms, the round trip to the game server in Seattle is minimum 100ms. So Eth vs WiFi at home is not so important if the WiFi is stable and the use-case is supported. My current router is 100% stable and maintains same low latency (no spikes), my old dropped connections sometimes and fluctuated.