Well I left the IP field blank in the server settings(it lagged); then I typed it in and had the same laggy results. I thought it had something to do with the IP settings, maybe not. When I was connecting to the server I typed LOCALHOST into the ip field and I had no problem connecting(nor did anyone else),
I also just typed in the actual ip [000.000.0.0:25565].
I was inquiring how bukkit worked cause I'm completely new to it; Was just wondering if there was more to it than what I had originally conceived: I downloaded the server and client, unzipped, ran both with a fresh .minecraft folder(had to downgrade from 1.1), and I tweaked the server settings a bit (just standard shtuff), than I ran the server and everything seemed fine Till I started lagging. My system isnt the problem nor my connection, probably has something to do with the bukkitstuff.
:(