We used LAN Messenger for a couple years before we switched to Mumble. It was good. No centralized server needed. Simple setup. You can change display names.

Mumble is more of a voice chat. It also narrates typed text which I thought was pretty cool. Also really good on the security side with SSL certificates on all communications. Geared towards gamers but we found it to be useful in the office.

LAN Messenger: http://lanmsngr.sourceforge.net/index.php
Mumble: http://wiki.mumble.info/wiki/Main_Page