Networking/Port Forwarding Question

I recently had some friends over to play games and I ran into an issue that I really didn't understand but have since read up on. But, I need some more clarification....

I set up a network with a cable modem and a router (with DHCP). We were trying to play Halo on the internet (this uses UDP ports 2302 and 2303). What would happen is that one person would join a game. A second person could also join a different game, but when a third tried to join a different game, one person would get kicked out. Two people could not join the same game at the same time either.

Here is my understanding of the situation:

1) There is one external ip address.
2) There are many internal ip addresses.
3) When a computer behind the router requests data from the Halo server, the single external ip address is sent to the Halo server along with the port information (or maybe the port is assumed, I don't know).
4) When the Halo server returns the information, it sends it to the external ip address with the port information.
5) At this point, how does the router know which computer to send the data to? It would seem to be the one that has that port open. But, how can they both have the same port open? It would seem that only one computer can have that port open at once, so why should I be able to have two simultaneous connections in the first place?
6) The follow on question of course, is what do you do to deal with this situation besides having separate external ip addresses for each connection? How could I host 8 computers on the same external ip address?
--Jay

You can. The router you have will be capable of running 8 computers on your network.

The data that is sent is broken down into packets. When a packet comes to your router it looks at the packet for where it's to be sent to. In that packet will be information on where the packet is headed and where it came from.

It all depends on the router. If the router is UPnP enabled, the game will work just fine on any number of clients. If your router is not UPnP enabled, you may want to open a range of ports UDP 2300 - 2310 instead of just two ports.