Playing ssf4 w/ friends when I have AE

I hate to post this but I didn’t want to post this in the ssf4 forum since it’s already clogged up, and figured it would be better answered here.
I tried to play ssf4 with friends last night (none of them downloaded AE) even though I have AE. From what I understood I should still be able to play with them by switching versions, but when I would invite them to lobby they would get a message saying something along the lines of “you do not have the proper content…” or something like that, and they couldn’t join. When I would try to join them it would simply say “unable to join session”.
They downloaded the free update kit and the latest update (1.03 or whatever the hell it is). We tried everything imaginable. I tried joining them by switching to the ssf4 version, then the AE version (idk why, I was just trying everything).
So did I simply misunderstand that I could still play with people playing ssf4, or were we not doing something correctly? Thanks in advance.

“Unable to join session” usually has nothing to do with AE and is usually a result of this:

Anyway, from what I understand, people who only have Chocolate SFIV will only be able to create lobbies for Chocolate SFIV. Players with Strawberry SFIV can create lobbies for Strawberry, Chocolate, or both. Look for this option somewhere in the lobby creation screen.

If this is so, you need to create a lobby for both and your friends should join it.