This sounds like it could be a fun project. It would take time to implement and would have some implementation details to work out (store data in the Least-Significant Digit or some advanced technique?) and may not be practical, but could be a fun thing to give to friends you want to talk to somewhat more privately.

I'll just point out some things you may want to look at / address before getting too deeply into this...



Computer-generated images generally make poor carriers of stego-hidden information because they are very predictable. Photographic images are ideal because they have noise and other random data that you can use to hide data inside of.

So the user would need a huge archive of photos for their conversations because the application would be unlikely to be able to generate ideal images to hide data inside of. I have a huge library (~400GB and growing) of photos I took myself, but I wonder if other users would have enough source material for really long conversations. My ISP would likely complain if I uploaded a 10MB image for each "hey" or "lol" said in chat.



One more thing is having a conversation with multiple recpients. Here public-key encryption shows its weakness (same message to multiple encrypted outputs), while private-key encryption shows some robustness (same message to same encrypted output).

You'll want a private-key approach to sending the encrypted messages, but with some way to authenticate the message (public-key) - the RSA Message Digests you see in some newsgroup posts is great here. Basically the application could use public-key methods to transfer a private key that everyone in the same chat session uses for communication, and then at the end of each message or somewhere it is signed by your own key.

Otherwise anyone in your conversation could pretend to be yourself or anyone else in the conversation (no authentication). Or if you use a pure public-key encryption technique, it could possibly fail to some kind of known-plaintext attack.