People Can't Join My Server

I have made a server on beta 1.4 and people can't join it for some reason, I made one on 1.3_01 and they could join perfictley but now on 1.4 it comes up with this when someone joins:

[INFO] olly123 [/81.132.248.188:61422] logged in with entity id 119
[INFO] olly123 lost connection: disconnect.endOfStream

They just float above the ground for about 20 seconds and then leave with that error.

I am running windows 7 32 bit
I dunno about the Java
No wrappers
I have tried the vanilla version