As requested here is a step by step procedure on separating a Torque 3D 1.1 Preview poject in to seporate server and client projects.

Torque 3D Version: 1.1 Preview
Platform: Windows
Credits for information and help go to:
Pitfall
Michael Hall
Sam Kitzmiller
JulianR
Scot Kinney
QuintonD

Thank you all for replying to my request post and providing the information you did!

Disclamer:
This step by step procedure is only known to work on a blank full project!
I have not been able to test any further, if this process does work on a more developed game please feel free to add a reply stating so.

Step by Step Procedure:

Note: Majority of the code blocks have been removed due to word out limit.
Please see The following Thred Post 14 onward for the code blocks.

1. Create a new project named "test" using the "full" template.
2. Duplicate the "test" project and rename the folder to "test - server".
3. Rename "test.exe" to "test_w32ded.exe".
4. Rename "test.dll" to test_w32ded.dll".
5. Rename "test.torison" to "test_w32ded.torison".
6. Remove the following files: - If you need the web browser plugin skip this step.
• IE test Plugin.dll
• NP test Plugin.dll
7. Remove the following Directories: - If you need the web browser plugin Dont remove the gameweb folder!
• game/web
• game/shaders
• game/art/gui
• game/core/fonts
• game/core/unifiedshell
• game/core/scripts/client
• game/core/scripts/gui
• game/core/art/gui
• game/scripts/gui
• game/scripts/client
8. Remove any referances to client material in game/main.cs
9. Remove any referances to client material in game/core/main.cs
10. Remove any referances to client material in game/scripts/main.cs
11. Copy the following files from %client project%/game/core/scripts/client to %server project%/game/core/scripts/server
• audio/Ambiences.cs
• audio/Descriptions.cs
• audio/Environments.cs
• audio/States.cs
• canvas.cs
12. Copy the content of %client project%/game/core/scripts/client/audio.cs into %server project%/game/core/scripts/server/audio.cs
• Do not overwrite the function in server/audio.cs as there needed to, simply place the client functions above them.
13. Create a file named "core.cs" in %server project%/game/core/scripts/server containing the following functions
• This resolved alot of SFX warnings!!

//---------------------------------------------------------------------------------------------
// Torque Game Builder
// Copyright (C) GarageGames.com, Inc.
//---------------------------------------------------------------------------------------------

//---------------------------------------------------------------------------------------------
// initializeCore
// Initializes core game functionality.
//---------------------------------------------------------------------------------------------
function initializeCore()
{
   // Not Reentrant
   if( $coreInitialized == true )
      return;
	  
	// Very basic functions used by everyone.
   exec("./audio.cs");
   exec("./canvas.cs");
   
   // Content.
   exec("./audioDescriptions.cs");
   
   // Seed the random number generator.
   setRandomSeed();
   
   // Set up networking.
   setNetPort(0);
  
   // Initialize the canvas.
   initializeCanvas();
     
   $coreInitialized = true;
}

//---------------------------------------------------------------------------------------------
// shutdownCore
// Shuts down core game functionality.
//---------------------------------------------------------------------------------------------
function shutdownCore()
{      
   // Stop file change events.
   stopFileChangeNotifications();
   
   sfxShutdown();
}



14. Created "start server.bat" in %server project%/game with the following code:

test_w32ded.exe -log 2 -dedicated -mission "levels/Empty Terrain.mis"



15. run the batch file and you will see your dedicated server start up.

End of Step by Step Procedure

If iv not forgoten any steps there should be 0 errors when you run your newly created dedicated server.
If however i have forgotten any steps i will update this resorce with those steps that are missing and make a note at the beginning of the resorce stating what additional steps have been added.

Hope this helps

Regards
Lee Wickham