Yes, you can play HL from the same machine that you run your
HL server. By default, both the HL client and HL server run on ports 27015.
This is why everyone has problems when they first try to play on their own server.
We can take care of this simply by adding a quickie to the shortcut you created
for your hlds.exe. Just add "port -27016", which manually sets the
server port to 27016. Now with the client on port 27015 and the server on port
27016, you are capable of playing on your own server, or at least playing HL
from the same machine that you are running your sever However, keep in mind
that anyone else connecting to your server is going to have a good amount of
lag because your system resources are being split between the client and server.
I personally have a dual 1.2 MP with a gig of ram. I have tried running and
playing on my box. I had a few friends help me out in testing, and found that
CPU was nearly at 100% overall and both people experienced lag. Your woes and
complaints would be tremendously less if you found a P2 400MHz to run it on.