i had the same problem. after many hours, i finally got it working. it has to do with your hardware or software firewall. i had the windows xp firewall turn on and still have kai working. so make sure you have the exceptions under windows firewall or any other firewall for kai on.
first run kai. if you don't have a ui on your pc, manually run kaiui.exe to see it on your pc. go to the magnifying glass icon. check to see if your network is reachable. if it isn't go to the next step.
choose the profile: "engine only (for dashboards)". make sure only "launch engine" is checked. set the kai port to 30000. leave kai deep port as 0.
run kai again. since u r using the engine only profile, you won't be able to see your pc ui. go and manually run kaiui.exe to see the ui on your pc. the moment you run kaiui.exe, you will see a ip address appear. make sure you write that down because you will be forwarding the port for that ip address. go to the magnifying glass icon. check to see if the network is reachable. if it is, you are all set. if not, you have to open up a 30000 udp port on your router. go to
http://www.portforward.com to see how to forward a port on your router. you want to forward the port for the ip address you wrote down earlier.
run kai and kaiui.exe again. it should be reachable now. now run xbmc and access kai. go into any areana and select play. it will prompt you to insert the game disc and go to system link. do that. you should be able to see the game hosted by other ppl. have fun
