Chris,
I am having a very similar problem with media server. I am using Win2000 on each machine with version 8.0.293. I installed MJ on each machine with the account that actually uses the program that has administrative privileges. I can use my library without any problem on the machine that is acting as the server. I can connect to the server from the other machine. I see a quick blip about downloading XXX KB's and then the IP address appears at the top of MJ. However, there are no files in the library. On the server machine, I left the default selection to "use MJ library on this machine" (not exact wording) - I did not select the other option where you specify the library.
The only other semi-unusual things are:
1) I un-installed the last released 7.0 version before installing the 8.0 version on the server. Not a single problem encountered.
2) I have a web server already using port 80 on the machine. MJ is automatically using port 81. This seems to work as I can connect to it.
I will get the exact messages when I get home, but the server shows a connection, etc, and then a request for the library. I think the last message was about the private thread, but I will have to double-check that.
I will turn off my other server and let MJ use port 80 and see if that works.