AFAIK DDO uses GameSpy chat client protocol for ingame chat system. Evolved it's own way.
Gamespy was using encrypted IRC protocol with just few additional login commands.
Encryption was just "XOR gamespy" at the beginning of GameSpy, later evolved.
IRC commands required at login attempt were to give Gamespy client ID and passwd, game ID (each gamespy chat implementation was for specific game) and CD-key, also later evolved.
I've recently found that someone was already working on reverse engineering GameSpy client protocols, and produced many tools to help tampering with the connections.
http://aluigi.altervista.org/papers.htm#gsmsalgThere is one tool there, peerchat_irc which is man-in-the-middle proxy, that accepts plain IRC protocool and functions as a encryptor connecting to the GameSpy server.
I've tried to play with it on Argo chat server 198.252.160.40:2900 and looks it communicates something! Jibberish, but still better than RAW connection that outputs no answers from chatserver.
I'm not any good at networking or stuff, but if someone is experienced and interested to build eg. chat client for DDO that website will be a good way to start.