I don't see why you would need 256 streams. You shouldn't be going direct from client to client.
For each client you need a single two way connection to the server. All input/output audio is directed through the server. The server than multiplexes all the audio a player is to receive into a single audio stream and forwards it along.
When you are in a private chat, the server simply only forwards packets from the other player in the private chat with you.
When using proximity, the server multiplexes audio from any player in range into a single stream.
I would assume any decent audio encoding package would have support for multiplexing audio together from multiple channels, but I don't know anything about JSpeex.