Chat plugin in very slow

Hi
The chat plugin as brought my site to a crawl and the new message delivery in chat its self is so slow. I have it set to Wordpress Ajax at the moment because when I set it to plugin ajax the chatroom shows but no users appear and sending messages doesn't work. I understand Wordpress Ajax slows it down so I need some options and fixes.

My server is dedicated with 4gb Ram and a dual core intel 2.8 cpu so there is plenty of resourses for it as the only site on there using anything. Before enabling the wpmu dashboard and chat my cpu usage was 0.5% on average and it's now 99%.
The only reason I have paid my membership is for the chat plugin. Please advice as I need this fixing as soon as possible.