9 months ago - Shurenai - Direct link
Mixed bag, Any mod that expressly changes xml without requiring additional files should be fine to only have on the host; Clients are issued the host's xml settings when someone joins.

Any mod that requires additional files though, such as a UI mod or that adds new models/textures/sounds/whatever would require the client's to download the mod themselves, or they won't have those models/textures/etc.

Without knowing how the mod accomplishes what it does, I couldn't say which way it'd be. When in doubt, have clients get the mod themselves too.