No you do not. I thought it would just be an easy meeting place.
Yeah, you tried to play a game by yourself. Server mode makes your machine the server, it then waits until the specified number of players joins then asks you to launch the game. Others would enter your IP when they use the Client mode. (User and password is concerned with the WCP Killboard, so in order to play you actually have to have a CIC account, something that I think HCl plans on fixing in the next version) The game will not allow you to start it until all players have connected. I believe the game will crash if you enter 1 into the player window.
It also sounds like you might have a firewall that is blocking the port WCP uses. I don't recall it off the top of my head, but search the CZ (or it might be in the enhancement readme) for the port you need to forward. That should cause the invalid socket error, I think.