I made a post about this in the classic server, but it would be even better for the SMP server
Original thread:
http://www.opticraft.net/index.php/topic,8217.0.html"The chat box gets really annoying when there are too many people talking all at once. It's hard to read conversations that you are trying to follow since there is so much being said all the time.
Maybe you could implement a local chat so that you can only see player chat within a 75 block radius or so?
that would clear up the chat, and add a calmer, more pleasant feel to the server."