There are hundreds of users on the server I am using and there's always someone signing on or off. With the default value for jabber-alert-presence-message-function this means there is a constant flurry of messages in the minibuffer, most of which I am not interested in.
A solution that works quite well for me is to only show the presence of people I have a chat window open for. If I am waiting for someone, I can simply open a chat for that person and will be notified, or check the roster. This keeps notifications at a much more manageable level for me. A patch adding a simple function implementing this solution is attached.
I would suggest to make this function the default but I haven't done so in this patch, that's a decision I leave up to you.
If you think that this should not go into the code base, I'd suggest adding it to the page on emacs-wiki.org.