I liked oldschool PowWow (that was oldschool) where the keystrokes were live. You could see each letter the person typed, as they typed it. I really liked that. You would see what they say /before/ they thought twice, and you would type the same. It would make things a lot more direct. It was more personal, and you had to pay attention to the conversation.
ICQ incorporated it in their "chat room" thingy but that was rarely used.
Y! and AIM with a direct connect has a "your buddy is typing" thing. I think that should be more of a standard across IM platforms.