It can tell you who is online. BUT, after a few log ons and offs you have to turn it on again. Mine is turned off in that pic. It was on yesterday. It should stay on until turned off.
I turned it on but it shows all but one friend is off. I just saw one walk by and talked to another. So, you have to check if it is on every time you log on.
You have to open that huge window to see the chat.
I use it for notes. I talk to my other toon. I put the name of the crazy mage I used so I know when a new one is there. Since I forget their names. The chat stays until you log off.