<b>Python 2.7 <s>334</s> <s>335</s> 327 Characters</b>
(My first time golfing)

(335) Forgot to escape newline.

(327) Removed redundant 100 for randint. Comparison of first character of response, instead of whole string.

    from random import*
    i=input
    s="Enter number:"
    p=i("Player 1/2:")-1
    h=100
    exec("N=i(s)","N=randint(1,h)")[p]
    b=l=0
    for _ in[0]*5:
     exec("g=(h+l)/2;r=raw_input('Guessing '+`g`+':');exec(('h=g','l=g')[r[0]=='l'],'break')[r[0]=='c']","g=i(s);b=g==N;print(('higher','lower')[N<g],'correct\\n2 won')[b]")[p]
     if b:exit()
    print"1 won"