if you go here
http://ioannis.mpsounds.net/blog/?page_id=3&page=2
will will see some pictures from the old version of the plugin... but the auto-hide feature is the same
What the auto-hide feature actually does is that it will put your contactlist window to any edge of the screen to a 2pixel strip (so it will be out of your way) and then you can restore the window by hovering the mouse over that 2pixel strip (like teh animated picture.
For auto-hide to work thou the contactlist must be attached to one of the edges, auto-hide must be selected from the preferences obvioulsy AND the window menubar SHOULD be hidden (if the menu bar is visible then it will prevent the window from auto-hidding to the screen edge.