All good suggestions, but the problem is the way that most of these chats are implemented will absolutely crush our server. Most chats are done via AJAX calls, or basically every 1 sec each user who has the page open makes a request in the background to the server to see if anyone has said anything. So if you have 100 users on the site, that's an additional 100 requests/sec ONTOP of our normal server traffic. Our server is relatively beefy, but it would slow down considerably during peak traffic.
The chat server on our forum is done using the same technology behind gchat and facebook chat, and is much more efficient. Now if only people would use it...