127.0.0.1 means THIS computer that you are on. So for your son, 127.0.0.1 would mean his computer.
From a command prompt on the computer running the eqemu server type ipconfig and press the enter key. You will see several lines. You want the numbers from IP Address or on Vista it's IPv4 Address. Usually something like 192.168.1.1 and use that for your sons eqhost.txt file 192.168.1.1:5999
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