First off, we'll need to download the source tarball.
:~$ wget -c http://switch.dl.sourceforge.net/sourceforge/pidgin/pidgin-2.0.1.tar.bz2
Next is to be sure all the necessary libraries & tools are installed on the system.
:~$ sudo apt-get install build-essential libglib2.0-dev libgtk2.0-dev libxml2-dev libgnutls-dev gettext libxml-parser-perl
GNUTLS is required if you want to use MSN and/or GoogleTalk, but it's OK to leave it out if you aren't using it ;-)
Next up, we unpack that source tarball and compile Pidgin.
:~$ tar jxvf pidgin-2.0.1.tar.bz2
:~$ cd pidgin-2.0.1
:~$ ./configure && make
:~$ sudo make install
It'll take a while between ./configure, make & make install but once it's done Pidgin is ready for action! :-)
For some reason the menu shortcut doesn't appear, but that's easily solved by a reboot. I think restarting your session would be sufficient but I was too lazy to bother. It's no biggie after all. Just run pidgin from terminal if there's no shortcut, configure some IM accounts, and you're ready to go.
The Pidgin GNOME menu entry... err... interesting? As you can see, it even runs alongside Gaim.
The Pidgin buddy list.