I hope for you and your friends' sake that the dedicated server PC is semi decent. I've ran it on a 750 mhz PC with 1GB of pc133 ram and it ran fine with 4 people - yeah POS, lol. Since then, I've upgraded the motherboard and processor and everything is a heck of a lot better. Everyone zones in a few seconds now.
The emulator doesn't eat a huge load of processes, and is one of the most well written emus, imo. If not, the best ever in my experience with emulators. I can actually have EQ and another server running at the same time - maybe even two. With that being said, I think your PC or server isn't set up properly.
That lag can be caused by a whole number of things. You need to give us the specs of the server to get an idea of what it can handle. It could be that since you're all new to this that something got stuffed during the installation or whatever.
And the other issue is because you're possibly in GM mode. When you're in GM mode (green name), nothing will react to you - meaning no aggro. Turn it off (the wikki should have the commands) and everything should be fine.
Remember, the bots are still beta. You should really try to play without them first before adding all sorts of things to your server. You're just going to end up confusing yourself (if this is your first time especially) and possibly breaking something in the process.
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