What is required, as I am attempting to encourage a couple of freinds to take part in?

They will have to use the 'Demo' mode. Do I need to host in Demo mode too?
Or, do we need a server?

Just set up a host in demo, it might work, it might not, if it doesn't, make sure port 3992 (I believe? correct me if I'm wrong) is open if you use a router and/or a firewall.

isnt the port 63392?

Yea that is it, I knew there was something before that 3, thanks Spiderbait.