I was able to join the demo chat without logging in. Is this a security breach?    

 This is not a security issue, this is part of the demo. This is a free third party chat. This is public and there is no need for a login in order to use the chat. If the admin has the chat enabled, it is available at user end and could be used by anyone without logging in.

It is key for users to stay connected and be able to communicate across the networking site, Other features available on iScripts SocialWare are the 'forum' for group posting throughout the network and the 'instant message' feature so that members can message any of their friends individually.