Facebook Chat works great on my N900.
When I sign in, my facebook friends who are online (on fb chat) appear in my contacts.

HOWEVER, I noticed something odd.
I merge the FB contacts with their corresponding existing contacts (so that they appear under the same name). So far so good.
BUT when I restart the N900 and sign in again, duplicates of all the fb online contacts (including those that I merged earlier) appear again...