Cell Phone IM

I use IM a fair amount. It lets me connect with people both down the hallway and around the world. I was tangentially aware that some phones had IM/SMS clients. Yesterday I dusted off my AIM client which I had neglected in favor of my YIM client. I noticed that one contact had a cell phone icon next to their name indicating they were available via phone. This got me thinking about IM on a phone. Does this really work? Is it really possible to have a decent IM conversation via txt on a phone? Do people really use all this elite sms speak?