Hi,
If your sister is on 10.5.x there is a "known issue" with Internet Sharing if it is On (even if nothing is attached as it were) and iChat.
The upshot is in OS 10.5.x Internet Sharing has to be Off.
If it is On because of Parallels then the two VPNs that are also created need also turning Off in System Preferences > Network and Parallels told to gets it's Own IP from the Routing device (Which she of course does not have).
What happens is Internet Sharing invokes the AMc to be a router and issues IPs to the devices connected.
This is turn provide s route to the Internet.
Unfortunately in Leopard (10.5.x) iChat can see this route to the Internet even if it is a WiFi able Mobile phone.
iChat cannot resolve tow connection to the Internet.
8:19 PM Tuesday; April 13, 2010
Please, if posting Logs, do not post any Log info after the line "Binary Images for iChat"