The gajim plugin interface is usable. I wrote a plugin and a python-only implementation of libotr. I haven't received much feedback yet and didn't really have the time to test it myself. The plugin is available in the gajim plugin manager, you need the otr module to run it.
The gajim people are working on a plugin interface. It is mostly done, but I need some more extension points. Currently I can't intercept outgoing status changes (less important) and outgoing messages (more important). See the trac ticket on that. As soon as that is ready, I can finish my otr plugin.
Note: the branch mentioned below is kind of abandoned for quite a while now.
(A long time ago in a galaxy far, far away....)
The gajim people agreed to host the Off-The-Record encryption branch on their servers as an official branch.
This howto will guide you through the process of installing gajim-otr. In
case you have comments, don't hesitate to contact me via mail or jabber at