> I want is a chat in which I can add to my forum that can 'grab' the Forum Member ID and set it as the Chat Nick ID
Yes, that is actually the main point of our chat service. see the mod for phpbb3 at http://www.gagalive.com/live/livechatexamplephpbb3

> Also, I want to stop anonymous users from being able to chat unless they are amember of the forum already
Create a chat room at http://www.gagalive.com/live/livechatadmin and use the chat room that starts with ###
(the chat room that starts with ### allows anonymous chat, allows anonymous nick change, logged in users have + prepended to nick)

To summorize, gagalive chat supports exactly what you want to do.

have a nice day.

Yeah, see, that's the problem here, I installed that MOD, phpBB3, and that's where the confusion is coming in, it's not forcing the Member IDs. It only sets me as Guest_4869 and not my user name no matter what account I login to. Also, I'm not understanding why you're suggesting this option

>(the chat room that starts with ### allows anonymouschat, allows anonymous nick change, logged in users have + prepended tonick)

because I don't want to allow anonymous (non-members of my forum) to chat until they sign upwith the forum.

Please help.

> because I don't want to allow anonymous (non-members of my forum) to chat until they sign upwith the forum.
oops... my mistake.
what i meant to say was
the chat room that starts with ## disallows anonymous chat, disallows anonymous nick change
use the chat room name that starts with ##

> , it's not forcing the Member IDs. It only sets me as Guest_4869 and not my user name no matter what account I login to
which would probably mean you are applying the mod improperly.

have a nice day.

This is how I have functions.php setup:
----------------------------------------------------------------------------------------------------

//!!!S START OF GAGALIVE CHAT MOD
//Modify options below
//chatroom: Chatroom name
// enter alphanumeric name for chat room and chat room creation will be instaneous
// secure chat rooms(room anems start with #) allow nick linkage with membership system and for security require authorization key
// note: for secure chat rooms that start with ### authorization keys are optional
// secure chat rooms require creation at http://www.gagalive.com
$chatroom = "##QP Live Chat";
//roomkey: Secure chat room authorization key
// use only when using secure chat rooms that start with #, otherwise leave blank
$roomkey = "581f0f2012099fdb3481d71f6ee2f818";
//gagaadmin: Chat room administrator IDs here. For multiple adminstrators seperate with ,(commas)
// only available when using secure chat rooms that start with #, otherwise leave blank
$gagaadmin =  "";
//heightz: Height of chat room in pixels
$heightz = 500;
//End of options
$gagaadmin = preg_replace('/\s*,\s*/', ',', $gagaadmin);
$gagaadmins = split(',', $gagaadmin);
$userz = $user->data['username'];
$usernickz = $user->data['username'];
function userKey($user, $roomKey)  {
return md5(md5($user . $roomKey) . $roomKey);
}
$userkey = userKey($usernickz, $roomkey);
foreach($gagaadmins as $value)  {
if($userz == $value)  {
   $userkey = md5(userKey($usernickz, $roomkey));
}
}
$usernickz = urlencode($usernickz);

if($user->data['user_id'] != ANONYMOUS)  {
$chathtml = '<center><script src="http://en.gagalive.com/Scripts/AC_RunActiveContent.js" type="text/javascript"></script><script type="text/javascript"> AC_FL_RunContent(\'codebase\',\'http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=7,0,19,0\',\'width\',\'100%\',\'height\',\''.$heightz.'\',\'title\',\'GagaLive chat room\',\'src\',\'http://en.gagalive.com/livechat1?&chatroom='.$chatroom.'&user='.$usernickz.'&encrypt='.$userkey.'\',\'quality\',\'high\',\'pluginspage\',\'http://www.macromedia.com/go/getflashplayer\',\'movie\',\'http://en.gagalive.com/livechat1?&chatroom='.$chatroom.'&user='.$usernickz.'&encrypt='.$userkey.'\' );</script><noscript><object classid="clsid:D27CDB6E-AE6D-11cf-96B8-444553540000" codebase="http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=7,0,19,0" width="100%>" height='.$heightz.'" title="GagaLive chat room"> <param name="movie" value="http://en.gagalive.com/livechat1.swf?&chatroom='.$chatroom.'&user='.$usernickz.'&encrypt='.$userkey.'"><param name="quality" value="high"><embed src="http://en.gagalive.com/livechat1.swf?&chatroom='.$chatroom.'&user='.$usernickz.'&encrypt='.$userkey.'" quality="high" pluginspage="http://www.macromedia.com/go/getflashplayer" type="application/x-shockwave-flash" width="100%" height="'.$heightz.'"></embed></object></noscript>';
}
else  {
$chathtml = '<center><script src="http://en.gagalive.com/Scripts/AC_RunActiveContent.js" type="text/javascript"></script><script type="text/javascript"> AC_FL_RunContent(\'codebase\',\'http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=7,0,19,0\',\'width\',\'100%\',\'height\',\''.$heightz.'\',\'title\',\'GagaLive chat room\',\'src\',\'http://en.gagalive.com/livechat1?&chatroom='.$chatroom.'\',\'quality\',\'high\',\'pluginspage\',\'http://www.macromedia.com/go/getflashplayer\',\'movie\',\'http://en.gagalive.com/livechat1?&chatroom='.$chatroom.'\' );</script><noscript><object classid="clsid:D27CDB6E-AE6D-11cf-96B8-444553540000" codebase="http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=7,0,19,0" width="100%>" height='.$heightz.'" title="GagaLive chat room"> <param name="movie" value="http://en.gagalive.com/livechat1.swf?&chatroom='.$chatroom.'"><param name="quality" value="high"><embed src="http://en.gagalive.com/livechat1.swf?&chatroom='.$chatroom.'" quality="high" pluginspage="http://www.macromedia.com/go/getflashplayer" type="application/x-shockwave-flash" width="100%" height="'.$heightz.'"></embed></object></noscript>';
}
$template->assign_vars(array(
'SITE_DESCRIPTION' => $config['site_desc'] . $chathtml
));
//!!!END OF GAGALIVE CHAT MOD


---------------------------------------------------------------------------------------------------

Chat.html

-----------------------------------------------------------------------------------------------
<!-- INCLUDE overall_header.html -->
<object classid="clsid:D27CDB6E-AE6D-11cf-96B8-444553540000" codebase="http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=7,0,19,0" width="100%" height="400" title="QP Live Chat">
  <param name="movie" value="http://www.gagalive.com/livechat1.swf?chatroom=##QP Live Chat " />
  <param name="quality" value="high" />
  <embed src="http://www.gagalive.com/livechat1.swf?chatroom=##QP Live Chat " quality="high" pluginspage="http://www.macromedia.com/go/getflashplayer" type="application/x-shockwave-flash" width="100%" height="400"></embed>
</object>
<!-- INCLUDE overall_footer.html -->
----------------------------------------------------------------------------------------------------------

and chat.php

----------------------------------------------------------------------------------------

<?php
/**
*
* @package phpBB3
* @version $Id: chat.php,v 1.37 2007/10/05 14:30:06 acydburn Exp $
* @copyright (c) 2005 phpBB Group
* @license http://opensource.org/licenses/gpl-license.php GNU Public License
*
*/

/**
* @ignore
*/
define('IN_PHPBB', true);
$phpbb_root_path = (defined('PHPBB_ROOT_PATH')) ? PHPBB_ROOT_PATH : './';
$phpEx = substr(strrchr(__FILE__, '.'), 1);
include($phpbb_root_path . 'common.' . $phpEx);

// Start session management
$user->session_begin();
$auth->acl($user->data);
$user->setup();

$mode = request_var('mode', '');

// Load the appropriate faq file
switch ($mode)
{
    case 'bbcode':
        $l_title = $user->lang['BBCODE_GUIDE'];
        $user->add_lang('bbcode', false, true);
    break;

    default:
       
        $user->add_lang('faq', false, true);
    break;
}

// Pull the array data from the lang pack

page_header($l_title);

$template->set_filenames(array(
    'body' => 'chat.html')
);
make_jumpbox(append_sid("{$phpbb_root_path}viewforum.$phpEx"));

page_footer();

?>

----------------------------------------------------------------------------------------------

Do you see any immediate errors that could be causing this problem?

Anyone? Suggestions?

Yep. ;-)
The php code at the top (in the functions.php file) specially configures the chat call to pass on the username information into the chat window when it opens. It stores this information in the variable 'SITE_DESCRIPTION'.
But you're never actually calling that variable, so that information is sitting there without being used. Here's what I'd suggest to you.
In the first file, change the line:
'SITE_DESCRIPTION' => $config['site_desc'] . $chathtml
to:
'CHATCODE' => $chathtml

Then in your chat.html file delete everything between the two includes and simply replace it with:
{CHATCODE}

That should fix it.