For hosting a multiplayer, here's a small tutorial:
-Go to command prompt and type "ipconfig". Note your public IP address.
-Start quake3 arena
-Start a singleplayer game. Press the "~' key and type "net_port". Note this value too. By default it is always 27960.
-Come out of quake and report in this thread the time, IP and port.
-Start quake 3, again.
-Click on Multiplayer
-Choose the "Internet" as source
-Click the "create" button
-Choose the game type, map and number of players.
-Check "Pure server" to make sure everyone is playing with the same mod as the server.
-Uncheck "dedicated server" if u are also planning on playing. Otherwise, if you want to only host, then check it.
For joining a hosted game,
-Write down the IP address amd port of the computer hosting the game.
-Start quake 3
-Go to options->player ans select your character and player name.
-Click on multiplayer
-Select the Internet source and click on the "Specify" button.
-Enter the details and start.
@Mohit, yes you can play on 256k. I have played on a 56k and Q3 is supposed to work even on 33.6k, so, no problem. As for the amount of data sent/received, I don't know. You might be able to reduce the amount of data sent by choosing your connection type in the Options->Network menu option as 56k. But I am not really sure.