A little clearer, about 25% shorter, pretty fun.
I stuck to straight JS since I'd like the source to be simple for most developers to understand.
Here's one I hacked up in 10 minutes. It's 40 LOC. http://gist.github.com/366590
The big problem with this is that it's just one server. I'm working on something called "NodeRed" (har har) that lets one scale out the frontend using Redis for communication. It's generic enough to do PUBSUB, chat, games, etc.
Here's an overview. http://fictorial.com/NodeRed.png
I developed the/a Node.js client for Redis if you care to dive into this stuff: http://github.com/fictorial/redis-node-client
And I think their APIs (limited to pub/sub) are very alike, kinda cool!