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Listen server = Hosted through your game while its on.
Dedicated server = a unmanned server generally hosted permanetly rather than temporarily, it usually is from a leased box.
In your case you are probably better off with a listen server.
If it dosen't give you the option to start the multi-player battle you probably don't have WSE on or the right version of the executable (but if it worked once, then unless you changed something it should work right again).
Also you might have adjusted the paths in wse.settings which might have broken it, perhaps adjusting the path in that might fix it regardless.
Thanks for the server explanation, I did not know that :)