We've had 20 users in before it started to slow. Apparently the user list was part of the problem and this is addressed in flashchat 4.1.2. I still would be surprised if the average server coped with more than 30/40.
There is also the option in 4.1.2 to use a seperate dedicated TCP channel (other than http on port 80) which would improve its performance - but this is a bit fiddly to get going, and also excludes people who can only use http connections.
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