I ve been running a chan site, but not sure what the best methods to moderating are, as not to break the law on the server hostings part??

Does any one have any suggestions.

Don't allow the posting of illegal materials, such as child porn or suicide advice or similar things. And don't allow the posting of anything that violates your hosts ToS. Not much more to it, other than keep on top of posts so you don't get a CP dump or something and not notice it for a week. I'd suggest a report post method for this.