Menus

The ICQ style expanding menus rate very highly with me for several reasons.  First of all the are extremely efficient on screen real estate and are the best way to pack many options into a small space.  They are also intuitive since they behave the same way as the Start button that has been on the users desktop since Windows95.  It also provides a space efficient place to put a logo, and lets you add branding vertically down the left-hand side.

I would strongly discourage adding any sort of toolbar to the top of the contact list window.  Many authors seem to feel the urge to do this, and I have no idea why as all it does is limit the width that you can shrink the contact list to horizontally, and take up vertical space.  Remember, this isn't a word processor we are writing.  People don't need to access menu functions every day with a Jabber client - most of the time it just sits there, and you click on peoples names.  I also don't think traditional drop down menus are very practical, as you are very limited with horizontal space on a contact list window.