The Players X Command
From version 1.09 onward, the player setting can be changed arbitrarily in Single Player mode, open battle.net and non battle.net Mulitplayer mode. In order to do so, one has to enter a certain command while in game. This is done by hitting "Enter", typing the players X command, and confirming by hitting "Enter" again (yes, it's the normal shoutbox usage). The command differs slightly for the different versions of Diablo II.
In genereal the Players X command simulates an amout of players in the game equal X, although less players are actually in game. X cannot be lower than the actual number of players in game. For example, if you're playing with 2 friends a multiplayer game via TCP/IP, you can only choose a number equal or greater than 3. All other commands will be ignored.
The Players X Command only simulates unpartied players. (Important for drop mechanics as explained above)
Note that the Players X command doesn't affect monsters that have already spawned by the time you type the command. I'm not entirely sure about the radius in which monsters spawn around you, but according to jiansonz's testings it's somewhat smaller than the distance from the stairs in Durance level 3 to Mephisto's spawning point (meaning that one could still tune down the player setting shortly after entering Durance 3 and thus have the Council spawn on a different player setting than Mephisto himself). To make sure every monster is affected, typing the command while still in town is recommended.
Players X does however affect all clickable items (i.e. logs, chests, urns etc.) immediately. In theory one could clear the whole area on p1, then set the player settings to 8 for maximised drops (i.e. minimised NoDrop) and pop all chests, urns etc. only then. This is in no way illegal, but considered cheesy by most players in the SPF. Ususall this (ab)use of the Players X command is prohibited in SPF tournaments.
In V1.09, when hit points of your summoned minions (e.g. Golems, Valkyrie) scaled with the player setting, it was useful to change the player setting to maximum before casting the minion and then immediately switch back to a lower player setting, which is also considered as cheesy.
In V1.10 minions' hit points no longer scale up with the player setting.
Versions 1.00 to 1.08
No players X command available.
The command is players X, where X can be any number between 1 and 64. You won't get any confirmation that the player setting has changed.
The command is players X, where X can be any number between 1 and 8. You won't get any confirmation that the player setting has changed.
Versions 1.10 and 1.11
The command is /players X or /playersX, where X can be any number between 1 and 8. You will get the confirmation players set to X on your screen.
This command is available in all versions of 1.10 and 1.11.