Before you can start we need to set the stage for the operation ability. In particular to run thw chat in Google Earth mode (> my settings) there are some changes to make in the viewer program in Google Earth.
The most important setting is the view of your own Web browser in Google Earth where the actual chat dialogue will take place later on. Therefore the option "Show web results in external browser" under categorie "Tools-> options" in the Google-Earth-Setting needs to be shut off.
If it's not possible to disable this option, please check whether the latest version of Google Earth is installed or not. In Windows Vista you may have to run the program may in XP compatibility mode.