Well, I've never seen the OS X client system pop up a message talking about "your server is in use" - it doesn't mention what kind of server (file server? web server? etc). I've seen "Your IP address is in use" which usually indicates an issue with the DHCP on a network router.
I wouldn't suspect hacking, but it's wise to take precautions - make sure your firewall is turned on and you don't have any unnecessary services enabled under Shared (eg file, web, SSH etc). Change your computer's admin password, too. If you're using a wireless network, make sure it's password-protected (and WPA, not WEP), and change that password, too.
Yes, it only said that my server is in use with (and listed the other number)
Two questions for you:
1. While checking on my firewall, i saw that there are two options: enable firewall logging and enable stealth mode. I have the first one checked. Should I also check the option about stealth mode?
2. Under firewall, I received three options: #1: allow all incoming connections, #2: allow only essential services, #3: set access for specific services and applications. Which one should I have checked?
1. You can certainly enable stealth mode - it essentially stops the computer from responding to pings, although it certainly isn't a catch-all (you can still get port-scanned).
2. Unless you have any sharing you need to do from your computer, use "allow only essential services". If you find that certain network programs, such as chat, stop working, switch to the "specific services" option.
You should assess whether you believe more risk coming from inside or outside your network - if outside, it's really your router you should concentrate on securing.