There is a fix for the hosts file issue, you need it in order to use either of the native messenger clients. I personally have had issues with Apollo, so I'm using something called MobileChat. To install the latest version of it, add this source to your source list
http://twenty08.com/installer.
The fix you need to install is called the "IM Chat 1.1.3 Fix", there probably is a 1.1.4 version of it, if not, then apply the 1.1.3 version of it as they are very similar.
If you are looking for a simple web based solution, I'd recommend meebo over anything else, it seems really nicely integrated for the iPhone/iPod Touch.
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