Secure Internet Live Conferencing
An Anonymous Coward writes: "Newsforge has an article about new generation secure chat protocol called SILC (Secure Internet Live Conferencing). The article features the protocol and its features like secure file transfer. Interesting article and very interesting protocol." We posted a story about SILC last year; looks like they've come a long way since then.
You are merely protecting the path between your workstation and the server through which you access the IRC network of your choice. Don't forget that IRC is a network, and that that it's distributed nature puts the security of your communications beyond your own control. Tunneling will not change much to IRC security. What would noticeably increase privacy would be encrypted discussions between client side scripts communicating through DCC. It would add a layer and would use the IRC server as a directory and session initiation environment.