Mate everything should be more or less set up already on the KOANET official download (if you download if from http://www.koanet.co.uk/league/download.php
the file on there is cool)
Bascially unzip the files and run UAE.
Then there are only about 4 tabs, the only one you need is the control config tab. Best bet is just to click ok and run a normal (offline) game.
Then get the control settings correct (by pressing F12 in the game it will take you to the config screen again) so mess around with the settings, you should only need to mess round with the port settings, ie port 0 joystick 1 or 2 etc.
As long as you have a windows compattible joystick that has been detected then UAE should detect it!
And then when you are ready meet someone on the http://www.koanet.co.uk/league
chat bit and reload UAE click on the kailerra button which will load up a server list.
Then chat to your opponenet on the koanet chat and decide the best server.
Double click on the server in the list and it will open up another window.
Then one of you creates the game (down at the bottom is a button to create new game and there is only one option to create a game called * which is ko2)
Then when you are both ready click on start and away you should go.
Nowadays its dead easy to set up, someone should be on later tonight my friend.
In the old days it was dead hard and took about a zillion attempts
But if you have adsl you should be up and running and playing full speed kick off in a matter of 5 mins