>Is my current server not a Terminal Server?
Well, not really, no ...
Let's have a quick overview for W2K:
Terminal Services is an optional component. When installed, it enables the "Terminal Server role" of your server. But this does not really make it a Terminal Server, because of the two modes the Terminal Services can be installed in: Remote Admin mode and Application Server Mode. Your server is really only a Terminal Server when Terminal Services are installed in Application Server mode (and note that the terminology changed for subsequent Windows server OS releases).
A quick overview of the two modes:
1) Remote Administration mode
Not really a terminal server. You can connect with a maximum of 2 sessions simultaneously, by default only for Administrators. This mode does not require additional licensing, and does not support multiple users running applications on the server.
2) Application Server mode
This is the real terminal server mode, i.e. your terminal server is now configured to handle multiple users, which run applications in a session on the terminal server. This mode requires a Terminal Services Licensing Server (this can be the same physical Windows server) and additional (paid for) licensing for all connecting users (TS CALs).
>Or if i wanted to allow 4 simultaneous connections i would have to buy 4 licenses?
As far as I recall, yes. And it is a CAL and a TS CAL you need