vlc media player - streaming trouble

I had some streaming trouble with vlc. I'm at an educational place, and I want to learn how to stream to my fellow students. (like in classmates)
Like I learnt from a person on irc freenode on channel #videolan..
(I've also gone to http://wiki.videolan.org/Documentation:Streaming_HowTo which seemed helpful)

I should use one instance of vlc to stream to a file, while I launch another instance to stream that file. Ok, why not? Here's how I (try) to do it:

From menu "File" I select "Open Network Stream... Ctrl-N"






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Without me doing anything, "UDP/RTP at port: 1234" was already selected. The only change I did was to check the checkbox "Stream/Save", then I clicked on Settings, just as is marked on the image.




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The things in the "Target:" field was automatically added when I set the various options below. I clicked, on ok, after the changes seen on this window.

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Then I click on "OK" again.

This is what I've done so far.