The #channel in $nick(#channel,0) needs to be the real #channelname or "#" ("$chan") if it is called from an event/ or command.
Type in channel window //echo -a $nick(#,0) <- needs two //'s to evaluate the $nick() identifier.
Also //set -s %HighestPeeps $nick(#,0) <- the -s switch will 'show' you if and what the var was set to.

If the %highestPeeps var isn't set, you can set it with /set %highestPeeps 0
Here also is (slightly) different code which has a check fo rth evar not being present
Code:
on *:join:[color:blue]#channel[/color]:{
  if ($nick(#,0) &gt; %highestPeeps) || (!%highestPeeps) { set %highestPeeps $nick(#,0) | set %highestPeepTime $fulldate }  
}
And again the #channel should be changed to whatever channel you want this for.