The first is a versus mode, which includes a three-on-three team deathmatch. Unlike in the normal game where you are often forced to play as Zael, the game's protagonist, you can pick any of the main story's party members, guest characters, or villains as you set out to kill the other team. Each character can only use the skillset they have in the main game, so it's important to build a balanced team of mages and fighters for maximum effect. And as neither equipment nor level transfer to this multiplayer mode, it all comes down to skill.
The other multiplayer mode is a co-op boss rush. After choosing a character, you join a team of up to six players and take down leveled-up versions of seven of the bosses from the main story. As with versus mode, a well-rounded team is a must. However unlike versus mode, both equipment and level transfer directly from the single player game. Luckily, low-level players can be nearly as effective as high-level players by focusing on healing and creating magic circles for the melee members to use.
Finally, upon winning in either multiplayer mode, you will receive some rare item, weapon, or armor usable in the main story as a reward.
Yet while the multiplayer modes are neither necessary nor particularly deep, they do have more than a little staying power. In recording the above videos, I found that even now, a year and a month since The Last Story's Japanese release, it is still possible to get full teams for both online modes. So even if the multiplayer isn't exactly a game-changer, it is still a solid addition to the overall title.
The Last Story was released today in PAL territories for the Nintendo Wii.
Update: Fixed information about what does and doesn't transfer over from the single player game.