Normally, LoadRunner is installed as One LR controller, this is where:
 - Full setup of LR is installed
 - Test scenario are created
 - Load Test of runs
 - Where all license(s) are installed 
With 1 to 100's of LR load Generators(LGs):
 -  No licenses required
 - These machines are used during load test to run the Vusers scripts
 - Can be ''Full Setup'' installation of LoadRunner OR the Standalone LG software only
 - Advantage of ''Full Setup'': The machines has all LR components installed (VuGen, LG, Analysis , etc.)
 - LGs should not be used for creating/editing scripts; However, by have the LR Full setup installed you have the ability to verify that a script can connect/''touch'' the Application under test from that LG.
 - Advantage of Standalone LG is the small software package to download
 - Disadvantage of Standalone LG is no other LR standalone component can be installed on that machine 
On all of the testers machines (their desktops/laptops/workstations):
 - LoadRunner Full Setup on their local machines for creating script, editing, debugging and running small smoke test, proof of concept testing with the community
 - Or,  At a bare minimum, the testers need standalone VuGen, and standalone Analysis on their local machine
 - They will still need physical access to the ''licensed'' Controller(s) to run full load tests 
Happy Testing