Do I need xbox live gold to play coop on steam? It still uses GFWL. I'm guessing yes because I don't get any prompt when I go to the radio room on the ship. Just want to confirm.

No GFWL games require Gold to play online as far as I know, not even the ones with cross platform multiplayer like Shadowrun or Universe at War.

Okay thanks - I may need to progress further in the campaign.

GFWL is slowly dying dude, it's suppose to official be dead by the end of this summer, so a lot of the games still adopting the GFWL stuff are migrating to other services like steam.

Co-Op on PC has always been busted, sadly. Unless you have friends who are playing, you can't do any online.