Up until recently I was using ejabberd for my XMPP server on dustycloud.org. It worked pretty well, was easy enough to set up, etc. Unfortunately it was also a total memory hog, sucking up more than 120MB of the memory on my tiny VPS. Given I was running the smallest Linode server possible (actually, I just upgraded to the second smallest today, which was pretty painless) this was making it rather difficult for me to add new services and sites.
After a very helpful conversation on identi.ca, I decided to make the switch to Prosody. I'm glad to say it was quite painless: after installing the .deb off their site, making a couple lines of changes to their bundled config file, and running their ejabberd2prosody.lua script, things are running smooth. Prosody only takes about 15 megabytes of memory (including what's cached). Nice!
One word of advice: ejabberd2prosody.lua isn't bundled with Prosody's .deb files currently, so you have to run it from source. The "migrated database" that it creates is set up relative to the script's own path it seems, so you'll have to move the database it creates out of the source directory into /var/lib/prosody. After I figured that out, everything was smooth!