There's been a slight change of the behavior of the OSCAR protocol which caused TerraIM 1.2.5 to display an error message after every sent IM. The issue has been corrected in 1.2.6, along with several others.
Changelog :: Download

The annoying white-on-white text bug is fixed! Also, we have auto-reconnecting, always-on-top buddy list, and uploading buddy icons. As usual, there's the full changelog, the discussion forums, and the download itself.

So, it appears AOL has tightened the rate limits, which causes the away message caching system to exceed the limit, expecially during login. Also, it seems TerraIM would run with no icons on some computers; this has been fixed too.

TerraIM 1.2 brings viewing buddy icons, invisible logins, and TOC2 support. Also, away messages are now cached and displayed in the buddy list tooltips and IM windows stay open after signing off. Moreover, an excellent new skin by Sergio Zlobin has been added to the Media & Skins section.
Full list of changes :: Forums :: Download it!

Another release is here - party time! TerraIM 1.1 comes with some very nifty new features: aliasing and remote control. I could explain what they do, but just go try them out for yourselves...