"All configuration must be done via a GUI, and must be persistent between runs of the program" seems to indicate that the "configuration" would be perhaps the location of the database (if they selected standalone) or the server and port if they selected "server". I would of thought that you would also store the user preference of "standalone", "server" or "no argument" as well, but it appears you make that choice from the command line, and it's a "done deal" by the time you hit any kind of GUI.
When you submit your assignment, each part (client and server) must be executable using a command of this exact form:
java -jar <path_and_filename> [<mode>]
The mode flag must be either "server", indicating the server program must run, "alone", indicating standalone mode, or left out entirely, in which case the network client and gui must run.