In Game Chat
 

Is the in-game chat considered IRC? The reason I ask, is the company I am renting my server from: "does not allow anything related to IRC on the network and if there is any kind of IRC traffic on any dedicated server, the service will be terminated without notice plus you will be required to pay a $150 fine."

If this is the case, would it be possible to set up the chat on a seperate server?

the chat is client side.. but it is also not avil to standard servers yet.. it takes a special setup

Your hosting company is referring to running an IRC Server. However, the chat channels have nothing to do with IRC.

What happens is, You set up your server to tell the client where the chatchannels server is. The client then connects to that server. In eqemu's case, the server it connects to then relays it to the eqemu IRC Network, and vise versa back to you.