Why does Freelancer multiplayer not work

The global server is currently down for ever(or until Microsoft deicides to put it up again), so you can't play online throught conventional means.

What you have to do is find the server you want to play on through their forums on the internet (I recommend Discovery; www.discoverygc.com) and download their mod and direct serverlink.
The direct link will make the server appear in your server tray when you click multiplayer->internet in freelancer.
Many servers don't use mods, but they should still have a direct link to their server.