Has anyone ever written a lite chat server and client in FreePascal? I would be looking for something that could handle 2-12 clients is all.

The mORMot ?

http://synopse.info/fossil/wiki?name=SQLite3+Framework

Chat sample based on bi-directional websockets.

https://github.com/synopse/mORMot/tree/master/SQLite3/Samples/31%20-%20WebSockets

Client:
https://github.com/synopse/mORMot/blob/master/SQLite3/Samples/31%20-%20WebSockets/Project31ChatClient.dpr Server:
https://github.com/synopse/mORMot/blob/master/SQLite3/Samples/31%20-%20WebSockets/Project31ChatServer.dpr

Documentation:
http://synopse.info/files/html/Synopse%20mORMot%20Framework%20SAD%201.18.html#GG_PUBLISHSUBSCRIBECHAT_EMF

In addition to previous messsage.
And to make life a bit easier.

https://drive.google.com/file/d/0B96fg3TpL5RDMXFNbkZuT0JHZ1U/view?usp=sharing

The archive holds a complete client and server for Lazarus with the mORMot, based on Sample 31.
Just unpack it (replace files) in the Sample 31 directory and you should be ready to go !

Has anyone ever written a lite chat server and client in FreePascal?

Not really a full client-server chat app, but should serve as a strong base:

* Single GUI app that can work as both client and server: http://svn.freepascal.org/svn/fpcprojects/lnet/trunk/examples/visual/tcpudp/

* Separated console client and server:
http://svn.freepascal.org/svn/fpcprojects/lnet/trunk/examples/console/ltcp/lclient.pp http://svn.freepascal.org/svn/fpcprojects/lnet/trunk/examples/console/ltcp/lserver.pp

Those are lNet examples and meant to be used in desktop applications. For web applications, BrookFramework has intended demo: https://github.com/silvioprog/brookframework/tree/master/demos/chat