On the GeeksNotNerds blog today, Zeekay has posted about a PHP and Ajax free chat application he came across - phpFreeChat.
Occasionally I'll want some sort of chat app for a website, and the options are overwhelming unimpressive [...] This is by far the best free chat app I've found. It's so good in fact...it's one of those little scripts you find floating around that begs you to go design a new site just so you can use it.
You can find out more about this free application from its website (including downloading the latest release).