I've started proper development on RTB4 now, so here's an update on progress for that.
One of the largest issues with using specific user accounts per player for a chat server was the fact that you'd have to enter your password to that account into Blockland. This caused the notable issue of other malicious add-ons intercepting that password as you login.
I've made a large modification to the server which means the authentication process now only requires you to pass through your BL ID and current Username and the server can then reliably authenticate you on those parameters. Furthermore I've left the original authentication methods in place so that you can still login to the service using an external Jabber/XMPP client (outside of Blockland) with your password as usual.
Your JID (basically your RTB Connect address, the thing you login with) will simply be YourID@returntoblockland.com - so mine is 150@returntoblockland.com - and these accounts will be registered automatically when you sign up on our forums. Anyone with an existing forum account will have RTB Connect accounts registered automatically.
Once authentication problems are out of the way, the next issue is to be able to update everyone's rosters (friend lists) when someone changes their Blockland Username. Quite frankly this is going to be a pain in the ass, unless XMPP has some pre-defined protocols to deal with this sort of thing. Needless to say I will be buried in RFCs for a few days to figure this one out. But once those two issues are out of the way, we should have a functional chat server!