It is really really hard to believe that games could live with the network latency, If the lag between pressing a key to move character on screen is over 50ms, the user experience will suffer. Often round-trip lag is more than 100ms which is clearly unacceptable - and it cannot be fixed with prediction.
Seconded. Anyone else have info on this? From personal experience in creating a networked 3d graphics application, latency is a huge issue even for synchronization ... never mind rendering + trying to get it to the client in 1/30th of a second.