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Can uTorrent (or any other bittorrent client for that matter) detect that a peer is on your LAN, and share parts through LAN instead of the internet?

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up vote 6 down vote accepted

It does if you enable the right option in the settings: enter image description here

You'll also have to unset the Private flag for the torrent you want to share locally. According to the help:

Enable Local Peer Discovery allows µTorrent to attempt to discover local peers via multicast. If a peer is considered local, transfer rates with the peer will not be limited unless Limit local peer bandwidth is also enabled. Local Peer Discovery will not be used for .torrent files with the 'private' flag set. This option serves as a default setting for newly-added torrent jobs, and does not retroactively affect previously-added. This option can be disabled on a per torrent job basis in the respective torrent job's Properties dialog.

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Perfect, thanks. –  nightcracker Sep 29 '12 at 12:08
    
If you unset the Private flag, the info-hash will change and you can no longer participate in the swarm outside the LAN. –  Encombe Jun 2 at 17:10
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