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My current reputation is 318 today i tried fro the chat on the stackoverflow, when i click on chat link the notification displayed even though my reputation is more than 20. :(enter image description here

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I got that quite a few times, it usually goes away if you refresh. – Yannis Feb 8 '12 at 12:17
It's displayed because it contains more information than just that, e.g. the link to the FAQ. – Daniel Beck Feb 8 '12 at 12:21
agree but bit confusing... – Smack Feb 8 '12 at 12:43

That one is controlled by a cookie; it isn't related to your reputation, so much as people new to chat (meaning: a very high rep user could still be new to chat). We could perhaps improve that, though - perhaps taking any prior chat usage into account.

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(somewhat) related feature request: "Welcome to chat" dropdown "click here to dismiss" – Tim Stone Feb 8 '12 at 12:25

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