I tried enabling transparent background, and xchat-gnome aborted with

The program 'xchat-gnome' received an X Window System error.
This probably reflects a bug in the program.
The error was 'BadImplementation (server does not implement operation)'.
  (Details: serial 998 error_code 17 request_code 144 minor_code 5)
  (Note to programmers: normally, X errors are reported asynchronously;
   that is, you will receive the error a while after causing it.
   To debug your program, run it with the --sync command line
   option to change this behavior. You can then get a meaningful
   backtrace from your debugger if you break on the gdk_x_error() function.)

xdpyinfo -queryExt | grep 144 gave

    MIT-SHM  (opcode: 144, base event: 94, base error: 170)

so the error was from XShmCreatePixmap. Indeed, xtext calls that function without checking that the MIT-SHM extension actually supports shared pixmaps. I'm going to attach a patch to fix this.