[hqarrse]

I added a $chat_data_path variable to my config_local as described vaguely near the start of the read me fileand it works fine.

from the readme

Configure the following parameters:

$chat_group
$client_size_width
$client_size_height
$chat_data_path
$primary_server_host
$primary_server_port
$chat_client_root_path
$swf_file_name (modification is not recommended)

$chat_data_path = "<123flashchat install directory>/server/data/default/";