The problem with playing on the same computer isn’t with the bandwidth, it is the CPU.
If you set your /rate as a player to 5000 and the cvar g_lanforcerate to 0 on the server the only limit is your CPU.
I have a Athalon XP 1800. I run 20 players using 5 - 10% of the CPU. If I try to play I use 98 - 100% of the CPU. The game uses so much processing power that it is actually lagging the CPU!
Try dialing the screensize way down for playing and lowering the com_hunkmegs and com_soundmegs on the server and player side.
Does anyone know if you can set the com_soundmegs to 0 for the server?
Eric B.