No, if they ran 'i0coind' then it uses server mode automatically. If they ran 'i0coin' with the GUI then they'd need '-server'. Without it their miner would not be able to connect and would give an error. You don't see mined blocks immediately because they take 120 confirmations to mature. Then they are reflected in the balance. They can also be 'orphaned' in which case they are lost. This is very common at the early difficulty levels when there is massive hashing power on the network.