You can't do a timing attack against a password hashed serverside, since you don't control the string being compared enough to make iterated byte-at-a-time changes.
Even if I'm misunderstanding, though, this particular remote timing attack is probably not practical in most programming environments; (for instance) straight C memcmp is below the measurement floor, even with signal processing.
That is a great paper; also, check out Crosby and Wallach for the modernized, math-ier take; with signal processing, the measurement limits are nanoseconds on a switched LAN (ie, if you could get a box deployed in the same hosting center as Blizzard) and tens of milliseconds over the Internet:
http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.65.9...
... and Nate Lawson's Black Hat talk which actually goes through the practical issues trying to set up and run these attacks against real systems:
http://www.youtube.com/watch?v=A0T8o-Aq3yY