Sorry for not being much descriptive. I'll try to be more precise.
To connect to the Internet, like all the other programs on Windows, ArmA uses a DLL
called ws2_32.dll, that is a file installed in C:\Windows\System32. If you put another file with the same name in the ArmA installation directory, ArmA will use that instead of the Windows one. It is like the Armalib from Kegetys (OFPWatch too?).
I've modified a program, that intercept the functions ArmA does to connect other computers. One of these functions is gethostbyname, which usually is used to obtain an internet address given a name, like www.ofpec.com
returns 220.127.116.11. Now, if ArmA asks for gamespy.com to check for duplicated CD keys, if the address it's found and valid, the check will happens.
You can usually avoid this in server.cfg (-config) with kickduplicate=0, BUT if you run arma.exe with -host, you can't avoid the check. server.cfg only works with -server, the dedicated one.
Why run arma.exe with -host? Because you will jump directly at start in the Multiplayer page "Create Game", and choose a mission to edit. There, you can edit your mission, your scripts, etc. Then, you can run another arma.exe to connect the former (on LAN, server "localhost" or "127.0.0.1") . On this you will see the multiplayer page (LAN) with your server in state "Editing". As you click "Preview" in the editor arma, the other game can join. On abort, both return the mutiplayer lobby. In this way you speed up a lot the testing of multiplayer game.