Just tried installing it on a server and I get:
[Mon, 21 Jan 2013 15:20:17 GMT] System.Start
info - socket.io started
[Mon, 21 Jan 2013 15:20:26 GMT] System.Error: SyntaxError: Unexpected token .
at Object.parse (native)
at auth (/opt/WebSML/networking/webserver.js:257:20)
at Array.forEach (native)
at MakeDataObj (/opt/WebSML/networking/webserver.js:250:33)
at Server.WebServer.wrap.dataFunc (/opt/WebSML/networking/webserver.js:348:13)
at Manager.handleRequest (/opt/WebSML/node_modules/socket.io/lib/manager.js:565:28)
at Server. (/opt/WebSML/node_modules/socket.io/lib/manager.js:119:10)
at Server.EventEmitter.emit (events.js:99:17)
at HTTPParser.parser.onIncoming (http.js:1889:12)
at HTTPParser.parserOnHeadersComplete as onHeadersComplete
[Mon, 21 Jan 2013 15:20:26 GMT] System.Stop

after starting it with "bash RunServer.sh" and opening the browser at port 80. Any ideas?

please create a package.json so that it's easier to deploy (e.g. http://package.json.nodejitsu.com/)

Would be nice to separate different concerns of the project:. So would be nice to have a structure similar to:
/compilers
|- abstract_compiler.js (implements some default code)
|- sml.js
|- prolog.js
|- latex.js
/server_root
|- index.html
/vfs (virtual file system)
|- local.js
|- svn.js
/network
|- socketio.js
|- browserchannel.js
/bin
|- socketio_server.js
|- browserchannel_server.js
|- basic_auth_server.js

When running your service in a nodejs installation on windows, it serves HTML pages as having content-type: plain/text. So instead of seeing an HTML page, I see the HTML text ... Any idea why?