You can use the Main Chat to talk to everyone or click on a user to start a private chat!
There are public chatrooms in which you can chat with other members and you can browse member profiles to make new friends.
Neither you or your friends have to download anything.
The project I'm currently working on, Facebook Chat, offered a nice set of software engineering challenges: The most resource-intensive operation performed in a chat system is not sending messages.
It is rather keeping each online user aware of the online-idle-offline states of their friends, so that conversations can begin.
One of the things I like most about working at Facebook is the ability to launch products that are (almost) immediately used by millions of people.