You cannot use CHMs on a network unless you are willing and able to amend the users' registries. See http://www.grainge.org/pages/authoring/chm_mspatch/896358.htm. Make sure the developer and product manager are aware of this. You should not amend a user's registry in this way without their knowledge and consent.
For server based help you should use WebHelp.
Check carefully with your developer. I was once advised the application was server based so I produced webhelp. Later I was told the application was on the user's desktop and it was only the database that was on a server. You need the help where the application is.
Application Local (Desktop) = CHM
Application on Server = WebHelp.
Your developer does not have to use AIR. You would generate AIR help from RH7 or RH8.
See www.grainge.org for RoboHelp and Authoring tips
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