I set the capture string to *host ip1, *where ip1 is my ip address. Then I run a Server->Client application on a single machine itself, but Ethereal fails to capture anything.I even tried *host ip1 and host ip1 *but even that didn't work
If I run the server or client on different machines, then changing the capture string to *host ip1 and host ip2 *will work without any problems.
http://wiki.ethereal.com/CaptureSetup/Loopback
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