I've actually progressed past this problem now. The problem I was having was that i tried to install mincraft forge with the rest of the mods, instead of leaving that up to the launcher. Now I have a different issue. the server starts up fine but whebn you try and join it says "this server requuire you have (long list of mods).I fixed this by extracting certain files from the mod zips (net->Minecraft-> server-> extract whatever is inside) However, Two mods still say they are needed. Tubestuff and immibis core.
For all I can tell, these ARE installed in the mods folder, any ideas?