Simple shared object question

I am very new to SharedObject in Flash CS3 and I am trying to connect/make a remote SharedObject (so I can create a chat room). I found this example code, but I’m having trouble with it:

var myNC:NetConnection = new NetConnection();
myNC.connect("rtmp://[yourDomain].com/applicationName");
var myRemoteSO:SharedObject = SharedObject.getRemote("mo", myNC.uri, false);
myRemoteSO.connect(myNC);

What is the application (in the parenthesis of the myNC.connect function)? Is it an swf I need to create, PHP script or something? Any help is appreciated. Thanks in advance!