Don't worry, we all had to learn...
What you did was correct, believe it or not!
However, there is a BETTER way, and that's to download the latest JAmpded.exe (dedicated server binary) for your OS of choice (win32 windows or Linux) and use that.
Read the threads in this forum (go back a month or so if you need to) and you'll find many explanatory threads, though the stickies are a good starting point.
Basically a dedicated server is this:
a Computer devoted SOLELY to running a game for others to join.
This is good because it saves on resources (you don't have to worry about rendering all those graphics for your own character) though it is intended primarily for VERY FAST connections, ideally OC3's, T1's etc, but can work decently on smaller games with DSL or Cable connections.
With proper attention and tweaking running a DS (for short) can be quite rewarding!
Anyway, read the threads, and download the Dedicated Server Binary and read up. It takes a bit to learn, but like I said, it can be great.
If you have a slow connection and just want to play, you might consider instead to just meet your friends on a public server or host a "listen" server (hosting a NON dedicated game) and giving your friends the IP. Just remember with Non dedicated as soon as you quit the game, nobody can join anymore.
The BEST way to run a dedicated server for most people is to buy or rent one. Check out Jediservers.com they have good prices and you can get a top of the line computer and connection for the cost of a PC game per month, and host a bunch of players.
Once you get going you'll have to edit your server.cfg file to how you want it setup up. Likewise you'll need to learn some console commands (called "rcon" short for remote control). The main command to know is \rcon status which lists the players and \rcon clientkick # to kick a person based on their client number in the status window!
PS: Host a Siege or CTF server, we need more of those! We've got hundreds of dueling and "honor" servers, but we need more team games!