I used the 4 player mod back before EE, and recently used it again (wouldn't bother playing this game otherwise after EE.)
Does only the host need to have this mod to work, or do all players need it?
Currently I host and I am the only one that needs to do the extraction/modifications.
Can we make four customizable characters, or can we only use 2 customs + 2 companions?
It does not change any character creation, it simply allows an additional 2 people to control characters. Essentially you will still have 2 created characters and the same ol companions.
Can the host play as a companion?
I believe so, sometimes I receive a warning that each player must control the main character even though we are. I just click ok and ignore it, haven't utilized it in this way extensively myself.
Should I plan on playing solo until I have both companions that we want to play with? Can they spectate until their characters are gathered?
You can alter it so that someone controls nobody, and yup they pretty much spectate. Its a little buggy because sometimes they lose their UI when attempting to control a character afterwards but my bro rectifies this by restarting the game.
How stable is this mod in its current iteration? Does it crash a lot or require a lot of debugging?
In the notes it states you shouldn't receive errors if you re-extract and modify the files after the patch. I followed the instructions but now receive an error at the main menu. Something about only being able to play single player due to the bad main/mod file...however I just click "ok" and ignore it, 4 player mod still works. Seems really stable to me, in all the hours I have played.
Are there any other problems I should consider before using this?
None that I know of, as always save a bunch in case your friend creates a comical situation, happens to some of mine who aren't that experienced but them finding out the hard way is half the fun!