[llamabeast]

So, if the differences are just in what each nation can recruit, it will be fine. That has no effect on battles, so won't cause problems with battle reports.

It'd go like this:
Player A wants to recruit a Basilisk. His copy of the mod says he can, so he's able to place those orders and sends his turn in.
The host receives the orders. Player A wants to recruit a Basilisk. The host checks its copy of the mod - yep, that's allowed, so it goes ahead.
Next turn Player B sees a Basilisk in Player A's fort. That's fine - it knows what a basilisk looks like (and indeed how it fights). How Player A got hold of a basilisk is of no concern to Player B (or at least not to his copy of dominions).

I hope that makes sense.

Yep, this would work fine on the LlamaServer. Obviously you'd upload the host version of the mod to the server.