i'm trying to play a multiplayer game, and i'm able to make it to the arbitration screen by joining, but it says "waiting until the server can accept new players" even though my friend isn't battling. what's up with that? i tried disabling the firewall, i tried checking the config, and we both have the same settings (default), and i tried all the other stuff i could think of? did the game break? do i have to reinstall it?

There are plenty of possible causes.
Try to start the game windowed (add -windowed to the shortcut parameters) as there are issues starting multiplayer games in fullscreen. You can switch to full screen once it's running (press Alt+Enter).
Add the game's folder to your firewall's exceptions, so all of the games executables are allowed to communicate with the network.

Check this thread, it is helpful for hosting:
http://www.gog.com/forum/baldurs_gate_series/windows_7_64_bit_cant_host_multiplayer

You could also use GameRanger, just in case you want to try something else.