At Bump we tried Campfire, but ended up using IRC (and use an open source IRC bot, https://bitbucket.org/yougov/pmxbot/src). I'm curious why you decided to go with Campfire instead of IRC.
Hubot supports IRC too (though probably not as well, we only hop in when Campfire goes down).
We depend on having a nice, customizable native Campfire client. We keep a custom js script in DropBox that Propane (http://propaneapp.com/) loads on startup. We've been able to modify the UI to show avatars, highlight successful/failed builds in Git push notifications, etc.
CF also gives us a few other nice features, like offline transcripts with search, and STARS.
Surely, you can do all this with IRC... and there are other chat apps that people like too. We're hoping that people add support for them to Hubot.
It has some web-oriented features like auto-linkification, condensing long responses, embedding of images, tweets, videos...
It's better to think of Campfire as a client than a protocol; there's nothing it doesn't do that a sufficiently advanced IRC client + logging bot combo can't replicate. I prefer the latter, myself, but I can see the value it adds for many.
Agreed, I should have clarified. We don't just use IRC, but IRC along with other tools to handle pasting text and file uploads. I think what has always bothered me about Campfire (which I'm sure can be solved) is that it's not easy to do thing from the command line. I want to be able to pipe the output of git diff to my pastebin, or upload a log file from a remote machine.
