to Work with "In-Browser Editing" in Muse should the site be hosted on muse? or can i do this on my host?
The site should be UPLOADED THROUGH muse (not: hosted on muse) so that every time that a change is made muse will sync the website. You can use whatever hosting service you want and to make changes you either:
go on
or
you re-upload the site from muse.
Here there is a video that might clear things up: