When I attempt to create a LAN game, the message box will sit at "Server status: up and running" but the message will never disappear and the server lobby will never appear. I can join other peoples games, I just can't host one myself. Has this been run into before? I'm running on XP.

Take a look at the readme included with the game. I saw something in there about dual-core machines not being able to host LAN games. That could be your problem, if your PC has a dual-core CPU. Unfortunately, it also mentioned that there's no fix or workaround for it.

If it is the dual-core problem, have you tried setting the executable's affinity to a single core? That seems to correct most issues older games have with multi-core machines.

If it's a campaign-based (not Hack & Slash) multiplayer game, check out his link:
http://forum.sacredeng.ascaron-net.com/showthread.php?t=46093
Covers various router issues that arise.
You also might want to start the 'dedicated server' app in the main game directory to see if you can get it running, *then* start Sacred and join in your hosted game.

Sounds like you need to open some ports to get LAN to work.
I know, it's LAN so you shouldn't have to, but it might be worth looking into.

go into options...set net speed to dial up IDSN

this worked for me. and for the record i have a dual core and didn't change the affinity

my problem isnt creating a game but joining one, i get the attrached screenie when i try to join a game. what should i do?

I'm having both issue mentioned here.
I'm trying to get a lan game going between my laptop (runing XP) and my desktop (running vista). The are both connected to the same router. I've forwarded all the ports I've read about and that didn't seem to do anything. I also tried switching the option in-game to isdn.
1. I can't create a game, if I try it get "Server is up and Running", but that stays up for like 30 seconds and then disappears and the game isn't created.
2. The desktop could create a game, but whenever I try to join with my laptop I get "Socket connection timed out" error.
Any ideas. I mostly bought this game to play over lan and this is really annoying.
Thanks.

For those who can't create a LAN game... Alt+Tab out of the game and see if Windows presents you with a window asking if you want to keep blocking the application or not. If it does, say you don't want to block it anymore.
I had this issue myself, so it may be the case with you as well.
No idea about being unable to join a game, though.

Thanks!
After all that router trouble it actually was the vista firewall that was preventing me from connecting. I still can't create a game, I've been reading about a problem with dual core machines, but that's not such a big deal since the other machine can.

You're welcome :-).
Indeed, sometimes (very) trivial matters hamper the enjoyment of a game...

i have the, that i am trying to play LAN with my brother, but i can´t niether create or join his game, can somebody please help`?

On my Windows 7 Laptop, I only had to change the network latency to Modem from DSL. This got it working.
On my XP box the only way I can host games is to disable a core in boot.ini. I've tried various methods of modifying the cpu affinity, and I can verify that they are working. Alas I still have to disable a core via msconfig to host. Not a huge deal, and sometimes I'll just fire up my laptop to host and still play on my XP machine anyway.
Has anyone successfully gotten hosting working on an XP machine by simply modifying the CPU affinity via imageCFG or other method? Or is the only real way to get it functioning to disable a core in boot.ini?
I find it rather ironic that Windows 7 (and vista I'm told) fixed a problem with an old game, rather than created problems.

Well, not sure it will work for everyone, but on my dual core here is how i managed to host a game.
1 Start "Dedicated Gameserver" from the start menu->GOG.com->Sacred Gold (as Ois suggested in post #4)
2 Choose a name, keep default port and choose "LAN"
3 You can change game type from the "Game Configuration" menu
4 Launch Sacred Gold
5 Choose Multiplayer
6 Select your character, click next
7 Now you should see the game name you choosed on the server, JOIN it
8 Other players should be able to join too
If i try to host a new game from within Sacred, Gameserver.exe doesn't seem to load properly. At least it doesn't show in Process Explorer. I didn't try messing with cores so far as this trick seems to work.
And i kept network latency to DSL/Cable/LAN so that useless NPCs are not removed and i can see children run away from my demoness :D