"Server has quit. Game over!" start of LAN game.
 

How annoying this is.. when I play with my friend on LAN, most of the time at the start of the mission when I try to get external view, a box pops up and says the server has quit.. but i haven't. It seems to happen when I go to external view for the first time, when the computer lags for a bit. Anye clues ?

Have you tried using Hamachi at all?

http://www.hamachi.cc/

I find that using it helps with some games and sims that are a bit shaky on MP, it makes getting Falcon working on MP a lot easier for example, and is useful on games where a central lobby is required for connection on occasions when the server is down. This worked for The Regiment, and helped a bit with server lag too, which is not a big issue with a sub sim, but a godsend with FPS and flight sims.

Having said that, I've not personally had any problems with SH4 on MP.

I've gotten the same problem with other friends using Hamachi. I'm not sure what causes it. Maybe a latency threshold that triggers it.