I have a tendancy to stay away from iframes as well, they just don't work across all browser platforms. I only recently went back to using DHTML because support for it is strong enough now.
You're right, refreshing the page would cause them to drop off line. I noticed that the who's online page will auto refresh. I wonder if there is a way to make an element on the chat page (say just a one pixel transperant gif) refresh so that the entire page does not reload, but the who's online mechanism "sees" the refresh?
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