OTR works great when both parties/clients are online.

I can't see how OTR would work when one client is offline since they need to both be online to do the key exchange dance. Happy to be corrected.

Not well. OTR doesn't integrate with XMPP in any way, so adding carbons is just going to feed undecryptable garbage to your other clients. Solving that is pretty much the same problem as mpOTR aims to solve. There's also a new proposed end-to-end encryption spec for XMPP being developed: http://tools.ietf.org/html/draft-miller-xmpp-e2e