I would say it's pretty safe, I use it on my forum and it's never been hacked so far.
If you have a moderately small forum it is allways best to use a shoutbox in my opinion something along the lines of vShout. Allways there so you can quickly have a look at whats going on while browsing the forum, whereas with flash chat you have load it up and you cant just flick throgh it all. But then on the other hand if you have a larger forum I guess a shoutbox would be too small.
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