OK as far as Gameguard goes, there is NO gameguard in the client so that setting is utterly useless. If it fixed an error then that was pure chance. maybe some legacy code that isn't activated unless the setting is made.
As far as i remember there is one function that actually gets called if the GG setting is true and it is pretty much empty so it serves no real purpose.
There was a time when rose actually used GG that we had to run a virtual local GG server in order to be able to start the client but that time is long gone since NARose dropped GG from their client many many years ago.
What error did this fix anyway?
As to your login problem.
First a few questions?
Is your own account logging in on a localhost setting?
Is your friend trying to log in over the internet?
Is your Router port forwarded for ports 29000 to 29200? These are the ports that rose needs in order to work on the internet.
Those are the typical conditions that can result in this problem.
in all 3 config files (*.conf) you need to replace your localhost IP (127.0.0.1) with your WAN IP address (not LAN address which is within your own router's LAN). You can find this address by going to a website such as
http://www.whatsmyip.org/. Also be careful because with many service providers this address will frequently change.
Give us as much detail as you possibly can with respect to your configurations.