Our company has two diffrent locations and both side is using FMP 5 Server.

We are planning to network two locations as WAN, setting Cisco Router at the both end.

My question is when is networked will they be able to see the local host files each other?

Or does users have to specify the IP address of server in other location.

In one word YES. Or you can create an Opener File or Launcher that does just that. Runs a script that goes out over TCP/IP and launches the remote file.

Manually the users must select IP or through any file already refernced to the other location.

To use "Launcher file" will be the easiest way.

Take a look in the FAQ forum for instruction on making opener files.