XMPP integration isn't much use without OTR -- and it doesn't seem to be auto-integrated since this is what I get when someone tries to initiate with me:
<userid obscured> has requested an Off-the-Record private conversation <https://otr.cypherpunks.ca/>. However, you do not have a plugin to support that.
See https://otr.cypherpunks.ca/ for more information.
I do have Pidgin/OTR installed on this machine (Win7).