I'm still getting this in Lucid.
Using 'me menu' I set status to 'Invisible' but it displays the 'Busy' icon.
If I then click 'chat accounts', it shows that MSN is set to invisible but 
Facebook Chat, Google Talk and the other chat that Empathy sets up are all set 
to 'busy'
In my empathy contact list, the status switcher shows 'busy'

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Setting status to 'Hidden' changes status to 'Busy' instead
https://bugs.launchpad.net/bugs/257190
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