Avoid getting in arguments with other users, and instead, try to peacefully defuse situations.
Don't publically insult anyone or be rude, even if you're banning them.
Avoid picking favorites; even if your friend breaks a rule, you must treat them fairly and give them the proper punishment
Don't abuse your moderator powers by breaking any of the regular [http://].
Swearing is allowed, but try to swear as little as possible to set a good standard for other chat users. By acting profane, you set a negative basis for behavior.
Do not, under any circumstance, sacrifice your own personal welfare moderating the chat. This is community service. If you're the only moderator online, and you have something to do, feel free to leave. Chat moderation should be something you should enjoy: don't feel constrained by obligation to the chat. The chat always comes second to real life.
Encountering a rulebreaker
Root out the rule they're breaking. Make sure it's an ACTUAL rule.
Warn the user in a calm and polite manner, and direct them to the rules if necessary
If they continue to fool around, tell them you will not hesitate to kick them.
If they continue, kick them
If the user returns, inform them of the rule they broke, and tell them not to do it again.
They usually stop at this point, but if it continues or worsens, you can kick them/ban them, depending on the severity of the infraction.