So what exactly is Chatter? It's a Facebook rip off that you use for work instead of for personal use (aka no pictures of you at parties, hitting on "friends", posting NSFW stuff). The main "Chatter" page looks just like the Facebook wall with threads, in thread comments, a like and a delete button. You can update your status, view your "People" (aka friends), share links, etc. Take a look at a picture of my "Chatter" page:
Look familiar? I had to blur a few things out like my companies name which appears above my name and my coworkers last name. Aside from the color scheme it pretty much resembles a less advanced version of Facebook.
Additionally you can add profile information, picture, contact information, an about me section, you can connect or "follow" people (twitter-esque), join groups, upload files and download their Adobe-Air powered Chatter Desktop application for easy status updates.
Maybe Facebook needs to offer a special version just for work?