LocalSO uses the original unmodified StickOnline client. For this reason, you must edit your hosts file to connect to the LocalSO server.
The LocalSO.zip download includes a program to do this automatically. This source code for this program is available here. If you prefer, you can always edit your hosts file manually.
Hosts File Entries
The hosts file on a windows machine is located at: C:\Windows\System32\drivers\etc\hosts
To connect to LocalSO, add the following entires to your hosts file.