Hmm, if the M4A files are DRM'd then he won't be able to play them as your license will be for your local machine [I think]. WombatShare *does* not work around any Lincensing techniques.
As for him being able to see you but not vice-versa, could you give me some more information about your machines please. Which OS, what are both your IPs and do you have multiple network cards, which version of wombatshare you're using etc. If you're using Windows XP please be aware that the firewall needs to allow traffic on both port 9005 (TCP) and port 9000 (UDP)
If we can't solve it, just add his IP in to your manual IP list (right click on wombat shre->configuration)
[edit: Glad the latest version fixed it, the older versions did have som issues. M4A is a licensing issue I suspect, I have no files to test this with
. Are the files DRM'd or DRM-free?]