Yes you need internet on the phone. Try this... delete the app from Options > Advanced Options > Applications, if it is there. Next, use the regular BB browser and go to Software for PDA and mobiles: MSN/Live Messenger, Yahoo!, AIM/iChat, ICQ, MySpace, Jabber, LCS, Sametime, Oracle, Reuters, Skype
and download the app. Finally, remove your battery for 30 seconds. You might also need the correct APN/TCP settings on the phone.
UPDATE: Today they released a new version, and it won't launch on my phone. Give them a few hours to sort it out. I hope it's working by tonight!