Ok, so basically, the server PC sends the interpreted keypres directly to the clients without interpreting the script on the client pc? I assume this means that the script on the client pc is only used if the key is pressed on the client pc. For instance if we have the following scripts:

On the server:

<Hotkey F1>
<sendpc local>
<key F1>
<sendpc 192.168.1.99>
<key F2>

On the client:

<Hotkey F1>
<sendpc local>
<key F1>

I press key F1 on the server PC's keyboard, which will result in F1 being sent to the active window on the server pc and F2 to the active window on the client PC.

I press F1 on the client PC's keyboard, which will result in F1 being sent sent to the active window on the client pc and nothing else. Correct?