If you have it set to 5mins say for example and you are logged in but you step away from your computer and are idle for 10 mins, after 5 mins of time you will be offline even though you are logged in yet. When you come back and click on a link you will be lit up as online again.

It is a matter of preference to the number. If you set it to big like 30 mins. Then even after you log out you will still appear as online for the next 30 mins.

This can mess up instant messenger and chat related, but see more other than that no big deal. If you have it set to 30 mins, and you log out others could potentially try to im you for 30 mins and get frustrated because you don't answer. This could happen with a 5 min setting too, but it does do away with some of the time issues. Even myspace does this after you log out you will see your online icon lit up for x-amount of mins and I think they are more than 5 mins, more like 10-15 range.

I think 5-10 mins is a good setting to keep im and chat updated.