There's a debug setting, I believe called NearMeRange, that you can adjust to a 
number that better suits your needs.

On Jan 29, 2011, at 3:50 PM, Dave Booth wrote:

> Whats the expected behavior of this tab of the people sidebar? I'm 
> currently sitting in a room with 14 other folks, half of whom are on my 
> flist and all within chat range - but this tab tells me "no one nearby". 
> Currently on Second Life 2.6.0 (219999) Jan 29 2011 12:57:40 (Second 
> Life Development) but to be honest I dont think I've EVER seen that tab 
> populated, no matter what build or how crowded the venue.
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