2 PCs behind the same router are trying to play together on 192.168.x.x addresses. Regardless of who hosts, the connection times out after putting the IP in and hitting connect.

However we are able to play using GameRanger, but the game is very laggy because of it. I'd like to just use LAN.

What are some things we can try?

edit: solved via windowed mode, then it started magically working in full screen thereafter???

Ok,
i know it is a little brutal to dig up threads that are so old, but... If anyone like me stumbles upon this page when trying to get co-op mode on LAN run in Icewind Dale: Enhanced Edition, here is a solution i found:

The "cannot connect to the server" type of error, when trying to run LAN campaign occurs only on new games.
- So make new server
- Create new game
- Setup your party
- start game alone (via LAN, yes it sounds sad)
- save your game (you need that "online game" save)
- quit
- make server again, now choosing "load game"
- voila anyone can connect

I hope it will save few people some searching.