well similer to the old msn gaming zone lol, if anyone remembers it
basicly a lobby is a webpage with a bunch of rooms which people would enter to play each other. The main lobby had a chat and you basicly met up with other players. when you went into a room the first guy in was like the host, he would launch the game and the neveryone elses game would launch. I know i`m not being very clear here
but the game should be launched from the server i believe.