It would just be myself and 2 other friends, I have a 150Mb download connection here at my house. Do you still think that would cause lag for my friends? Should I try and host it from a separate laptop?
the lag i speak of will be in the form of FPS lag for you as a player running the server at the same time.
for your friends as long as you are not downloading / uploading, and have ~2+Mb down and 1+Mb up they wont have
any lag in ether version unless you have an extremely slow cpu(more than 4 years old and low end).
if its something you are going to do regularly, i highly suggest just setting the local server up, it is pretty quick and painless to just get it running, and then you can set up the server.cfg file how you guys like it.
if you open the game and hit start server it will launch with the default settings everytime and if thats what you want, thats great and will work.