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0f7b58d
(Get the code!)
Forgive my offering the simple solutions first...
On the matter of it not connecting when first run, have you gone into Edit Preferences and ticked the box "Automatically connect at startup". In this context startup means the starting of empathy, not the starting of Ubuntu.
On the matter of it not showing whether your contacts are available or not, you could try selecting from the menu "View | Offline contacts" and see if any appear.