I would recommend jabberd2 vs 1.4, as the 1.4 is out of date and it seems no one who uses it has the desire/cycles/ability simultaneously to udpate it. jabberd2 is really not that bloated; sqlite is no longer a big deal and I have it running on a small VM probably with 512M, and I bet it doesn't even need that. multiuser chat is harder/flakie, but see chat/mu-conference. others recommend ejabberd. I have not tried it, partly because no ejabberd fans have explained to me how to do multi-user chat with it.
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