I tried run a 1.4.5 vanilla server in school during a class where the teacher was out for the day and whenever anyone joins (even me through localhost), their client stops responding and the server console shows that the player lost connection.

The computers in school have minecraft authentication servers and external minecraft server connections blocked but servers within the school can be connected to.

I know this as i ran a 1.3.2 bukkit server not too long ago in school and it ran smoothly.

The 1.4.5 server and client are fully vanilla and it still doesnt work. I tried the jar file and exe file for the server.

I also know that servers work as lan servers work (i tried and played LAN in school).