I've downloaded all the required files in order to host an on-line multi-player Minecraft game on my computer, and successfully made a server. However, it seems that I can only make games in free build mode, where you have unlimited resources to build with. I prefer the survival mode where you have limited hp, there's a day/night cycle, mobs spawn, etc (the registered user version, not the classic free version).
Is it possible to host a survival multi-player game, whether on-line or local?
EDIT: Given Minecraft is undergoing huge changes please update your answers as appropriate.