BORGChat 

BORGChat is a LAN instant messaging application for Windows. It allows users from the same local area network to connect with each other and chat or share files. When you open the application, you will see all the computers under the same subnet and those who have this application installed will show as contacts.

You can chat with all the users at once or start a private chat with one of them. You can also initiate file transfers with any user who has BORGChat installed. Each user can set their status to "here", "busy", or "away", which will influence the way in which the application warns them about new messages. There is also a message board, where users can create posts for others to see.

The developer's website isn't a very good source of information about this application's features and strengths, but everything is much more clear once you run the application. The options screen is very complete and it shows all the features this application offers. All in all, this is a nice free tool that you can use to communicate with users on your network. It seems to work well and it can be customized quite a bit. There is support for logging, smileys, and emoticons.