Okay here's 3 questions.
Which Encyption method/Package is better to use with Pidgin ?
I would imagine that If I use Encryption 3.0, and another user
uses OTR, the messages are not readable by either of us because we
both have to be using the SAME Method/Package right ?
PIDGIN or Miranda matter of preference ?
You have to match it to whoever you're talking to. That's why we include both. So you can install either or both depending on who you're talking to. It's worth noting that OTR is available for more IM clients and is built into some popular ones like Adium. Here's the full list.
Sometimes, the impossible can become possible, if you're awesome!