That's right: 255.255.255.255 is in fact the default value for a non-resolved address (INADDR_NONE). As someone mentioned in an earlier post, when using SOCKS5 mIRC does not need to resolve the address since 1) It is not connecting directly to that address, 2) The SOCKS5 server is performing the name resolution, and 3) The client may not be able to perform name resolutions.

That said, does anyone see any issues with making mIRC independently attempt a name resolution when connecting through a SOCKS5 server? On a secure/closed network that limits access through a SOCKS5 server, the worst that can happen is that the DNS fails. On the other hand, a separate DNS may show that address in your connection logs, whereas connecting through the SOCKS5 server and letting it perform the name resolution will not. Just a thought.