Here's how I did it if anyone is interested.
1) Go to http://www.addonchat.com and create an account.
2) You will receive an email, and be able to access your personal control panel.
3) Once in your control panel, there is a link for "Chat Room Link Code"
4) Myself, I used the Embedded Code
<applet>
<param>
<a>Java Chat Software</a>
</applet>
5) I have edited my code to the following:
<applet>
<param>
<a>Java Chat Software</a>
</applet>
6) Now to insert it in to replace the existing shoutbox
Open: forum/templates/your template/index_body.tpl
Find:
<iframe></iframe>
Replace with above modified code:
<applet>
<param>
<a>Java Chat Software</a>
</applet>
7) Exit and save. Remember to edit all your templates you are using.
8) Now users just enter a nickname and enter the room.
NOTE: When you refresh your page, you will have to login again.