Text scroll
Modernize the chat by scrolling chat into line position. From the 8 lines fade in the bottom line as it scrolls in, fade out the bottom line as it scrolls away (fading for 16-bit only, probably). Move as a whole. Scrollspeed around 0.4s per line lock.

Fading wouldn't be possible, chat already uses SPRITE::PALSHIFT so it can't also use SPRITE::BLEND_NORMAL.

Makes sense. What instead of fading, chat moves into the screen from the left, slides upwards into each line position, and then moves offscreen to the left?

Might look good, dunno. This is something that could be easily prototyped/distributed in AngelScript (using dummy strings), so I would recommend that, code up a design that feels good to you and see if other people also like it.