Issues

Since both parties think they are communicating through an ordinary tcp connection, they each tend to think data has been sent in tact to the other party when it has really just been sent in tact to a chat server. This seems to cause problems when browsing the web--and streaming videos in particular. When streaming videos, the browser seems to make multiple connections to the same server, occasioally closing some connections. Sometimes, the browser will close a connection before important information from the server is read off of the chatline. Then the browser has no idea it is missing information and the whole data stream becomes corrupted (i.e. your youtube video stops loading). 

As of now, there is no encryption and the protocol is relatively easy to recognize. Unlike the previous problem, this should be easy to remedy with some crypto functions.