How to use a disk image
Adium is distributed on a disk image. As this confuses some people, we thought it prudent to explain how you use a disk image, and why you shouldn't run Adium from the disk image (what that means will become clear).
We also have a video version of this explanation.
I suggest you brew some coffee or tea, or make a sandwich. This will take several minutes, but it'll explain a lot.
When you go to the store and buy software, it comes on a CD or DVD.
When you download software, it doesn't come on a CD or DVD (they're hard to fit through communication lines, and the bulge of a 5″ disc traveling through a wire would distract passing motorists). It has to come on or in something, so it comes either in a zip archive (.zip) or on a disk image file (.dmg).

A disk image file is just a file that behaves the same way as a CD or DVD. You “insert” (the actual verb for disk images is “attach”) the image by opening it, such as by double-clicking on it.
When you attach the image, Mac OS X then mounts the volumes on it, just as Mac OS X mounts the volumes on a CD or DVD when you insert it. An icon appears on the Desktop and in the Sidebar for each volume. (A volume is the structure that contains all the files and folders on the image/CD/DVD.) 
←Both of these are volumes.
The correct way to install Adium is to attach the disk image, drag the Adium application to the Applications folder, whereupon Finder will copy it, then drag the application from the Applications folder to your Dock (or just launch it from there, then drag it to the place in the Dock where you want it). You can then eject the disk image and, if you want, delete it.
For your convenience, both the Adium application and your Applications folder are accessible in the Adium disk image volume's window. The icon on the left is the application; the icon on the right is an alias to your Applications folder. Just follow the path of the hand.
In fact, most applications now that use a disk image include an alias to your Applications folder, with an arrow (or in our case, a hand reaching down from the clouds) suggesting to you that you should move (drag) this thing (the app) over there (to your Applications folder).

Your problem was caused by you running Adium from a disk image
The above text, as originally written, was sent on 2007-08-10 to a user who had contacted us with a problem that was caused by her running Adium from the disk image. Hers was one of several such problems, which we'll catalog and respond to below.
The executive summary of all the items below is: Don't run Adium from the disk image; run it from the Applications folder instead.
On update, Adium says “Update Error! Adium does not have permission to write to the application's directory! Are you running off a disk image? If not, ask your system administrator for help.”
This occurs when you run the copy of Adium that's on the disk image volume. The disk image is not writable. When you try to update, the updater attempts to swap out your existing copy of Adium with a new one in the same place; if you're running Adium from the disk image volume, that's where it tries to put the new one.
The solution is to copy Adium from the disk image volume to the Applications folder, then run it *from the Applications folder*. You don't need to, and shouldn't, ever touch the disk image again. In fact, you can throw it away.
Double-clicking on a disk image is not the installation procedure. It's only the start of the installation procedure. The rest of it is to copy the Adium application to the Applications folder, then eject the disk image volume. Then you run Adium from the Applications folder.
When I run Adium, it says it needs to be copied into the Applications folder. I do that, but the next time I run Adium, it says the same thing!
Copying it into the Applications folder isn't useful if you don't open Adium from the Applications folder thereafter. See the above instructions about the disk image. Don't go through the disk image every time you use Adium; you're wasting time that way, because it takes a few seconds to attach a disk image, and you're making extra work for yourself, because you must double-click both the disk image file and later the application itself.
Once you've copied Adium to the Applications folder (manually or using the dialog box), stop using the disk image. Eject it and don't touch it again, because you'll probably never need it again. Instead, go to your Applications folder (⇧⌘A in the Finder) and launch the Adium application directly from the hard drive.
The disk image refuses to eject!
You're running Adium from the disk image. Install it (see above), then quit it; only then can you eject the disk image volume.
I can't delete the disk image!
You're running Adium from the disk image. Install it (see above), then quit it, then eject the disk image volume; only then can you delete the disk image file.
I can't run Adium. I run it once, but now, it changes to a question mark when I click on it.
First, we should point out that an “alias” is a chunk of data that points to a file; usually, the alias is stored in another file (an alias file). The Dock also uses aliases; each of the icons in the Dock represents an alias, although they are currently all stored together in one file rather than in separate files.
You dragged our disk image's volume to the Dock, and Dock dutifully made an alias to it. Then you ejected the disk image volume, and deleted the disk image file, rendering Dock's alias to its volume invalid. (If you had not deleted the disk image file, clicking the alias would re-mount the volume. Handy, no?) Thus, the question mark when you click on it.
I can't run Adium. It says "The alias 'Adium X [version]’ could not be opened, because the original item cannot be found."
First, we should point out that an “alias” is a chunk of data that points to a file; usually, the alias is stored in another file (an alias file). The Dock also uses aliases; each of the icons in the Dock represents an alias, although they are currently all stored together in one file rather than in separate files.
You dragged our disk image's volume to your Applications folder; because you dragged a volume, the Finder made an alias file pointing to it, rather than copying it (because a copy could take awhile, and a lot of people are used to the alias behavior from Windows). Then you ejected the disk image volume, and deleted the disk image file, rendering your alias to its volume invalid. Thus, the dialog box when you double-click on the alias.
In the case of an alias to a disk image volume, the message “the original item cannot be found” is a little bit misleading; the obvious original item is the disk image volume, and that is where the alias is pointing, but the original item that the dialog refers to is the disk image file.
One way that you can spot an alias file is that its icon has a “badge” of a little curved arrow:

The attachments shown below are the images included above, among the text of the page. You do not need to worry about them.
Attachments
- Adium.dmg.png (1.6 kB) -
Disk image file.
, added by boredzo on 08/17/2007 02:09:38 PM. - Adium volume.png (2.7 kB) -
Adium 1.0.5 disk image volume.
, added by boredzo on 08/17/2007 02:10:08 PM. - OS X DVD.png (3.4 kB) -
Mac OS X DVD volume.
, added by boredzo on 08/17/2007 02:10:20 PM. - Adium alias.png (2.0 kB) -
Adium alias file (demonstrating alias badge).
, added by boredzo on 08/17/2007 02:10:39 PM. - Adium.zip.png (1.9 kB) -
Zip archive file.
, added by boredzo on 08/17/2007 02:45:20 PM. - Adium disk image volume window-halfsize.png (25.7 kB) -
Adium disk image window (half-size).
, added by boredzo on 08/17/2007 02:53:29 PM.