Ah yea, I suppose I did forget to mention a couple things, server version etc. etc.
So,
Server: Tekkit 3.0.4 (most recent)
Client: Tekkit 3.0.3 (recommended build)
No errors in console. Hosted and played on Home PC with 1 other player (2 total)
PC Specs:
Ram: 10 Gigs
CPU: Quad 2.8 (OCed 3.1) with 6mb L3 Cache
I don't think Video card is at all relevant, if it is, let me know.
I have never had problems hosting and playing on the same PC as the server is hosted, not even a touch of lag.
If you need anything else, let me know. Sorry I forgot to mention them earlier.