Your problem, at least on the serverside, is your extra loop in the 'else' statement. It shouldn't be there.

else {
                while ($line = <>) {
                        print $client $line;
                }
        }
[download]

That part. Replace the while(){} with next. Then put an exit after the else's closing bracket. What happens is the code accepts a connection, then it forks and the child process goes into an infinite loop reading from the client, while the parent process goes into an infinite loop reading from stdin <>. Thus the child never exits and the server never accepts another client.

Cannonical example from perl cook book:

#assuming $server initialized
while($child = $server->accept() )
{
  next if $pid = fork();
  #CHILD STUFF
  exit; #kill the child process
}
[download]

Forking servers are vastly simpler then single process servers using select.