Noticed this on the GOG version of the game.

"Multiplayer notice: The game's multiplayer mode is compatybile only with the DRM-free versions of the game bought on GOG.com."

I ended up buying my copy from steam, mostly for simplicity sake as I already have D2 on steam but now I'm wondering if the steam version will be limited to playing against people who have the steam version or if it will work against people who have the retail box as well.