I can't even tell if I've done this right.
 

I installed the plugin and all, put in the the necessary ip adress (i think), pressed connect, and started playing mp3s.

Now it forever says connecting and has never said connected. Is this right?

I can't even figure out how to test it to see if I'm broadcasting!

The Shoutcast site needs to be more user-friendly and describe what you need to do....

PLEASE HELP ME.

EDIT:: Now it flashes between connecting and not connected... and I can't even disconnect.

Do you installed the DNAS server?

Well I installed whatever it was that i downloaded from the shoutcast site. And I switched the ip to "localhost" based on something that I read here but I'm still not sure that thats right.

Check out the Sticky post titled:
SHOUTcast: Important Info & Answers to FAQs. READ ME!

Scroll down a bit and look for the section titled:
How to Setup a Live Audio Stream -> How to set up an Internet Radio station
How to Setup a Live Audio Stream -> 15 Steps to setting up SHOUTcast

Additionally, check out HeatRadio's thread, A Basic Guide To Shoutcasting