For the problem showing text in the wrong (UTF-8) character set, you can make some changes in the file /modules/mod_shoutbox.php.
Search for "function jal_addData(" and after " $jal_user_text = substr($jal_user_text,0,500);
" add this:
$jal_user_text = mb_convert_encoding($jal_user_text, "ISO-8859-1", "UTF-8");
if your encoding is ISO-8859-1 or change it according to yours.