From Sega Retro
Kaillera is a client/server software network written by Christophe Thibault that allows onilne multiplayer gaming in emulators. Rights and source code of the Kaillera were sold to Etai Hugi, Israel.
Kaillera works with emulators of console systems that achieve multiplaying by multiple joystick ports. Kaillera sends the input (keystrokes) of the players back and forth; only one system is emulated - mostly independently - in each computer, in the same way a offline, local game would be played, the only difference being that the other player's controller is operated remotely. This is the main reason for Kaillera not being usable in handheld emulators, which function by sending data between two (or more) different systems.
Kaillera itself is not a game or an emulator, but a free protocol and matchmaking service that can add multiplayer support to various projects (such as emulators), and game emulators are a popular choice.
Emulators with Kaillera
In addition, there are several third-party versions of MAME with Kaillera, but these violate the MAME license by not having the source code to the Kaillera client library distributed, even though the source code to the modified version of MAME itself (such as "Mame32k") are always provided.