from http://developers.facebook.com/docs/chat/
The DIGEST-MD5 SASL mechanism is available to support traditional XMPP
or multi-protocol IM clients that are
not customized for (or even aware of)
Facebook. This mechanism requires
prompting the user for his or her
password; therefore, it should only be
used when necessary. In particular, it
MUST NOT be used for any client that:
•Proxies the XMPP connection (the
connection must be directly from the
user's computer to Facebook).
•Reports
messages or any other information
about user activity to a third party
(including the client developer).
•Integrates with Facebook, or has a
Facebook Application ID. If your
application does any of the above, you
must use Facebook Platform
authentication instead.
So, you can't use DIGEST-MD5 with a bosh server but you must use X-FACEBOOK-PLATFORM