Yes, the chat and the site are separate. The site is custom made to my specifications, no cookie cutter community shareware template crap here. I bought the chat and it is on my servers, but it was premade chat software, the best I could find with the most features. It is however flash, the site is not flash. Most people know flash is being used less and less and they are not fixing that broken Youtube feature, I emailed them about it months ago and was told they will not fix it, not for me, not for anyone that bought that software.
The chat itself currently works, as do most of the features in it. By using a third party feature like that, you do open yourself up to possibilities of problems. If Youtube had not changed their code, the feature in the chat would still work. So every time Youtube would make a code change, the chat people would need to make a patch for that. They have decided since flash is on its way out, it's not worth their time to make fixes like that.
I realize in time the chat will need to be replaced with a non flash version, but as it currently works and is very expensive to replace, it will be left as is for the time being. I'd like the video feature in it to work as well, but if they are not willing to fix that, there's nothing I can do about it, they make it so ones cannot access the code and fix it themselves.