On Tuesday 06 March 2007, Newkid wrote:
> Hi there!
>
> Would anyone kind enough to let me know how does Google API support
> chat? 

It's an implementation of the XMPP protocol.

> What role Google API will play in the client - server 
> application?

IIRC, client end.

> What is Jabber? What exactly it does? Please explain me 
> step by step.

This is well documented.  Start here:
http://en.wikipedia.org/wiki/Jabber
http://en.wikipedia.org/wiki/XMPP

> Being a NewKid of this block, I have NO idea about the chat
> application. My requirement is to make a haselfree chat application
> like GMAIL (is showing in LHS of the page).

Why not join one of the bajillion Jabber client projects already in progress?
http://en.wikipedia.org/wiki/List_of_Jabber_clients#Free_Software

-- 
Paul Johnson
Email and IM (XMPP & Google Talk): [EMAIL PROTECTED]

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