Yep, that's all part of LFS. Only works for licensed users though... so start saving those pennies.
Licensed racers can upload skins to LFS World and anyone with auto-skin downloading enabled on their client will get you skins as soon as they join the server.
Demo racers can see each other's skins too, but you will need to share them manually, there is no auto download feature in the demo. Just put your mates' skins in your skins_x folder and tell them to do the same with your skin and you'll be able to see each other's skin online in multiplayer.