Twitter is fine as long as you know how to use it. As I see it, Twitter is primarily a marketing, public relations, and networking tool. People who use it to update a blow by blow of their mundane lives don't really get it and should be ignored.
The best way to use Twitter as a professional is to start with the search feature at search.twitter.com and actually search for topics that are of interest to you or what you're trying to do. You will find individual tweets on those topics, and then you can start following the people who posted the most interesting or informative ones.
After a while of doing this, you'll find that the feed of your twitter friends starts to resemble an RSS feed of interesting news, catered to the topics you're interested in.
Also, people generally follow people who follow them out of politeness. Once you've built up a network of people who might be interested in what you're trying to market, then posting something interesting and informative about your product is more likely to meet with success, and if people find it interesting they will re-tweet (forward) your post.
However, in order to market something successfully, it has to be a good product. Palace was at one time a good product, but at this point it is fragmented and in a severe state of disrepair. The fact that its central organizing entity went bankrupt is still the primary reason for the languishing status of the community. No updates to the server have been made since eons ago in 2002, and the server itself is badly out of date and struggling to keep up with the demands of today's internet connections. None of the client software available is completely compatible and the original Palace32 software is all but irrelevant. And even the very fact that you have to download and install software at all is a huge barrier to mass adoption in this age where everything is moving into the browser.
In order to be able to recover from this, there needs to be a new relevant technological advancement that can take what was once great about the Palace and update it to fit with today's Web 2.0 culture. Palaces should be embeddable in web pages, sharable via IM, Twitter, and Facebook. (Imagine seeing facebook feed posts like this: "Brian is chatting at Avatar Palace! Click here to join him!")
This is why I have been working on OpenPalace. I have already completed the core functionality for a new Flash based client that I wrote from scratch that can hopefully be fully functional in a way that InstantPalace never was. Ultimately it would be nice if its capabilities could even be extended to the point where desktop clients are no longer necessary at all, and the entire platform could be taken to the web and made viral.
I am hoping to create a centralized account system across all of palace space, where you can keep your prop bag, saved avatars, bookmarks, etc., and use them from any web connected machine. Only once that kind of functionality is in place can the Palace as a concept become accessible to the masses. Centralized accounts and online storage for your props, I believe, is the number one most important advancement, and is a hard prerequisite for mass adoption.
Development is coming relatively slowly at this point since I'm just working on it in my spare time, but I have made the project open source so other ActionScript 3 developers are welcome to coordinate with me on features to build and submit improvements.
http://www.openpalace.org/
Brian