Version:            (using KDE KDE 3.4.1)

The dialog box contains an input field "Server:", and it is filled with the server name by default, but it really expects the domain name to query, not the server's name. These two are usually the same but sometimes different, and querying with the server name instead of the domain name leads no answer to the query.

My suggestion is to rename that field to "Domain name:" and, by default, fill it with the domain name of the used account (the suffix of the "Jabber ID" after the @ symbol).