6. How to Chat Off the Record
When you use Gmail's chat feature, conversations are automatically stored in your Gmail chat history or the history of your contact. If you're engaged in a conversation that you don't want stored or searchable, you can take the conversation "off the record."
Do this by clicking the Actions drop-down menu at the top of the chat window. Select "Go off the record." Note, however, that people you chat with may still choose to save chat histories in their Gmail settings.