This is due to the built in "Internet Connection Firewall" in XP. Here is how to get it working without disabling the entire firewall:
1. Go into Control Panel-> Network Connections
2. Right click "Local Area Network" and select "Properties"
3. Left click the advanced tab
4. Left click the settings button
5. Under services, left click the add button
6. For description type "Ident", for Name of IP put the name that identifies your system with your ISP OR your IP if it is static.
7. Both external and internal ports are 113 by default and TCP.
8. Click OK all the way out.
No reboot is needed and the Identd function now goes through without a hitch. This should work for any programs that use port 113 for Identd. Enjoy your chatting again!