Basic Set up of Flash Media Server

Can someone please explain to me the basic way Flash Media Server 2 works. I want to make a online multiplayer game, but just can’t figure out how all of these things work together.

Do just need set up a bunch of files with FMS and upload them to my website and it all runs fine with nothing else?

or do I have FMS constantly running on my computer at home and people on the online games are connecting to FMS on my computer through the swfs on my website?

or do I somehow upload some FMS thing that is always running on my website somehow.

or do I have to buy a special web hosting service, somehow install something that lets it know that I’m trying to use FMS and have all of the files on that web site.

or something else. I just don’t understand the basic set up.

Jason