http://www.cisco.com/univercd/cc/td/doc ... tm#xtocid1
Gives some background information on multicast addresses and how it works. From it: "all IP multicast group addresses will fall in the range of 224.0.0.0 to 239.255.255.255" They act as "party lines" -- any number of PCs can listen in to the data being transmitted by a server on one of those addresses. There are certain addresses reserved for special things in that address range, as noted in the Cisco document.
Also, from the Cisco document:
"The range of addresses from 239.0.0.0 through 239.255.255.255 contains limited scope addresses or administratively scoped addresses. These are defined by RFC 2365 to be constrained to a local group or organization. Routers are typically configured with filters to prevent multicast traffic in this address range from flowing outside an autonomous system (AS) or any user-defined domain. Within an autonomous system or domain, the limited scope address range can be further subdivided so those local multicast boundaries can be defined. This also allows for address reuse among these smaller domains. "
In other words the 239.x addresses are generally the "right" ones to use for local multicast activities. 239.20.30.40 is a random choice by me -- I know it's in the proper range of multicast addresses.
Generally, PCs "know" about the multicast addresses, that they are okay to listen to, if commanded. For instance, where I work we are on a 144.219.x.y network segment -- I can still listen to a 239.20.30.40 multicast (assuming anyone is serving data on that address in my office LAN).
So, even though I am on a 144.219.x.y LAN segment, and my own PC has an IP address of 144.219.whatever, if I want to multicast I would send the data out on an address between 220.x.x.x and 239.x.x.x, because those are the official multicast addresses. Other PCs on the LAN, with IP addresses in the 144.219.x.x range, would be able to "tune in" to data being served by me.
If it's "another LAN area", meaning something that is distant from where the server PC is located, you would need routers or other devices connecting the LAN segment where your PC is located with the other, client, PCs. You would then need to have UDP multicast enabled on the routers in the middle.
You cannot UDP multicast stream over the Internet itself (should not try to) -- ISPs generally have UDP multicast streaming turned off, so that millions of people don't all try to flood the limited number of multicast addresses with their home Webcams. That's where point-to-point comes into play, specifically sending the UDP stream to an intended, single, client -- this is the version where you would actually plug your friend's IP address into the UDP address field on your VLC server.
Note, VLC can actually use point-to-point UDP for multiple clients -- look at the VLC documentation for how to start up a stream to several individual IP addresses at the same time.