I've already done some work which has improved it slightly, but haven't had much time to do research on it.
Now I'll be gone till Sunday for holidays meaning development will be on hold till then
However, the progress I did make was pretty good I'm starting to think it's possible the cut-scene loops we were hitting was due to the other player being on another team now that I see kantanomo's mention to that.. I still ran into obvious AI sync issues but for now I'm trying to resolve the over all process of having players join/quit or restart maps to get them both into it flawlessly.
I was close before I stopped working on it, I had it to a point where host started map.. 2nd player joined (knocked them back to lobby), host started again without 2nd player, 2nd player joins again and it just works (All of the above with no external app running just my xlive.dll, and host nor 2nd player had to do anything them selves).
Now once I solve the cut-scene loop and fix some obvious crashes it should work fine the first time but we'll see.
In general the Crash which happens appears to be something on the server end isn't spawning a specific network transport object to handle some kind of synchronization, not really sure what it is yet but I plan to add validation to at the very least prevent the crash and see what happens.