Integration means the ability to use your forum credentials to log into chat. Usually this means chat won't even display a login page if you're already logged in.
Without access to a vbulletin forum, I can't work on the integration so it was taken out of the development release... but I'm not sure why you're using the development release. The old vbulletin stable release should work.
If you'd like me to add and test the vbulletin integration into the next release I can do that, but will need full ftp access to it and a database to work on, or a copy that will run on my localhost. I checked the vb website and saw nothing about them providing a version for developers but maybe if you ask them they can give advice on how to do it safely.
As far as I know there are some vbulletin users floating around who use AJAX Chat, like this person a while back
http://www.vbulletin.org/forum/showthread.php?t=269509 so I would encourage you to poke the vb forums as well and see if anyone is interested in supporting it.