can't figure out streaming

[bgugi]

i'm running vlc 0.9.4 on ubuntu 8.10

so i want to watch some videos with a friend off in internetland. I tried streaming with vlc, media > open file > (select files) > stream (little drop down next to play). i tried several outputs, http, rtp, prefer udp over rtp, inputting his ip or no ip, but nothing worked. he always got a "couldn't connect to mrl" when trying to connect to my ip. my upload according to speakeasy is almost twice what imput and stream bitrates are, and i can't connect to vlc players over localhost, so i think i'm doing something wrong with the streaming setup.

help, please?