Thank you, this boiled down to a misunderstanding of how IM chat/various protocols work, you cleared that up.
Any chance I can get an engineer to tell exactly what line of code tells the contact list to compile a complete list of domain users? Its really bad that we cant simply turn off the fact that every user on a domain shows up by default. My rough estimation on how to proceed would be to remove that 'populate list' command, then populate the list strictly based on the contacts added in that user's contact list (I believe I saw a web services api call for that)