I tweaked the connection code today, and we also got the in game chat overlay running today, although it still needs some work. If you'd like to try it out, follow these instructions:
1) Close Demigod if it's running
2) Download http://sd.stardock.com/impulsereactor/testchat.zip
3) Extract the files and copy them to Demigod\bin. You may have to reboot before replacing the files if they're locked.
Hit Shift+Tab to unhide the chat window. It'll use your windows user name for now, although it will eventually use your player name from Demigod. The chat room is #demigod on irc.stardock.com.