p2pool is solo mining where solo miners share the reward.
You could make an "manual p2pool" by doing this:
1) 20 trusted friends may an agreement to all solo mine and share the rewards.
2) They decide on a lower than full block difficulty to keep track of work as "shares" earned.
3) When someone finds a block he emails the other 19 friends.
4) All friends email each other a list of the shares they have completed in chronological order in the last 2 days.
5) Each friend runs a script which compiles a master list of the last 1.3 million shares (if difficulty 1).
6) The script determines the payout % of each friend.
7) Once all friends have reached consensus the block finder pays out each friend their share
repeat steps 3-7 for each block found.
Obviously there are three major issues:
a) it is a lot of manual work.
b) it is open to cheating and requires implicit trust of the other friends.
c) due to limits of a & b there are scalability issues.
p2pool simply takes the "manual block sharing among friends" automates it, and puts in cryptographic safeguards which make it impossible for any "friend" to cheat the rest.
TL/DR. p2pool is solo mining with shared rewards.
https://bitcointalk.org/index.php?topic=63079.msg739679#msg739679
