How do people create chatrooms?

Most modern chat-rooms are built using AJAX and a server-side language to process things & interact with a database. Or you could go down the Java or Flash route. It’s no small task to build a nice, usable, reliable chat-room.

Do you have much experience with web dev? Any server-side languages (PHP, .NET, Ruby, Python, etc.)? If not, I don’t think chat room applications are the logical place to start.

Try searching for some more basic tutorials for your chosen language and once you get a hang for it and understand the processes, you’ll be in a much stronger position to try to create complex applications of your own.

You could try Campfire. There’s no shame in using a hosted solution. http://www.campfirenow.com . But yes, you would need to learn a programming language such as PHP to implement this yourself.

Alternatively, you could also use Ajax IM that you could customize for your own taste or simply host it on a server and you’ll have your very own IM service