Ok, I have found the option you seem to be looking for.
Select: Tools -> Plugins
Scroll down the list and find the plugin: Windows Pidgin Options
Put a check mark beside this plugin, then click on the Configure Plugin button
On the configuration window, there is a section called Buddy List which should give you the option of making your buddy list a Dockable Buddy List, which allows you to pin the buddy list to one edge of the screen, and a dropdown of options for Keep Buddy List on Top. I have the dropdown set to Only when docked on my system.