Step #1: Create a Jabber account

Click the REGISTER button to register a new account, otherwise when you try to log in you'll get a username/password error.

Step #2: Select "Join a Chat" from the "Buddies Menu"

Not much more to this step, so on to...

Step #3: Join the Conference Room

Note that the room is "inkscape", not "#inkscape" and the server is "conference.gristle.org". There is no password, so leave that field blank.

A couple more things:

You do not have to use gristle.org as your server, check out http://www.jabber.org/network/ for a list of open jabber servers.
For US servers I can recommend transactim.net and myjabber.net

Do NOT use jabber.org as your server, it is both experimental and under an incredibly heavy load, the result is lousy performance.