This reminds me more of an old DOS shareware game called Spacewar (http://www.youtube.com/watch?v=yY5qHe2VadA), which was also multi-player although that game also allowed turning on gravity and warping (I see a comment mentioning warping in this game but I don't see it in the command list.)
This was one of my (and my friends') favorite small games back around 1990.
Edit: It was a DOS game when I played it. It is good to feel like a young person when talking about a game that I played 22 years ago.