For wireless VR stuff, it's usually 25-40ms range. I believe the encoder hardware is the bottleneck at this point. New Quest 3 is supposed to have better hardware accelerators.
I don't notice, with a couple virtual screens.
There's also the specifics of how this is grabbing the simulator output and copies it out to the ALVR server. So possibly another frame or two of lag is introduced.
I'm talking desktop screen to VR eye, with desktop streaming. So yes, that, plus simulator latency. I would think input latency should be pretty small.
Quest 3 will (hopefully) allow for higher bitrates and maybe AV1 support but I don’t see it having a huge impact on overall wireless latency. Decode time on the old SoC is only a few ms with h264 and really the only thing h265 brings to the table on a bandwidth unconstrained local network is 10bit color.