Chat Plugin - can't login public users

Hi, I have installed the chat plugin on a Wordpress site and it seems to work ok with users logged into Wordpress. However, I want public users to be able to join the chat without being members of the site. I set the plugin options to allow public users, and if i go to the chat page in a browser where I am not logged in I see the chat window and a form that asks for a username and email address. I put a name in and an email and click the login button but nothing happens, rather than seeing the box to allow me to enter chat messages the user name and email just disappear from the form and the screen stays the same. Almost like a failed login attempt where the login page just reloads, but I don't get any errors or warning. Although the url does update with what looks like the name and email address i just entered now passed as parameters. But I can't use the chat. I am using a custom theme and w3Total Cache if that makes a difference.

Any help would be appreciated.

Kind Regards,

James