I have written a custom myspace style component that allows people to have a profile url like this:
www.MyWebsite/sampleusername
which redirects via mod rewrite to my component:
RewriteRule ^[A-Za-z0-9\$\#~%\*]+[^/]$ /myspace/index.php?x=1

The problem is that the mod rewrite does not work with JoomSEF, I am assuming I will have to modify the component itsself.

Any ideas would be appreciated

Hello,

I think it could be possible to do this using the .htaccess file, although I can't help you with the actual rules. Or as you said, you can modify the component:
In your component, you can use the JRoute::_() function in Joomla 1.5 or sefRelToAbs() in Joomla 1.0.x on the URL so it gets processed by SEF component. However, to make JoomSEF create nice URLs, you will need to create either the router.php file (I think there is a tutorial for this on Joomla website in Developers area) or an extension for JoomSEF. Unfortunately, there isn't a tutorial for this at the moment, but we're working on it. You can take a look at our extensions to see how they works.
You can also contact us using e-mail and we can make an extension or even modifications of your component for you for some fee.

Best regards,
ARTIO Support Team