If the game uses matchmaking and has an option to ping filter its good (like halo 3)
If you can choose the player hosted servers like in vegas 2 or gears, thens its good.
But call of duty's matchmaking (no option for ping filtering) and Battlefield (dedicated servers in the US, near us, etc) are bad for australians. The solution is to either deal with it, or quit and join over and over again (in cod4).
To aliman22:
Lag will always exist unless you can design a way to send a signal faster than the speed of light. It takes about 140ms for data to go across the world and back in a perfect "theoretical" environment at light speed, and thats already too much. Don't forget to add the computational time of the various "checkpoints" and computers along the way. Australia and the usa are on opposite ends of the world, but most xblox live players are in america.
You might get the impression I hate latency ^^^
DopeyDavoid
I know that its due to the ping rate for example I have a ping rate of 20 ms to the Uk servers and 200 ms to some Us servers. Also a high upload speed would also improve quality of your online gamming as well. In case anyones interested in their broadband speed www. speedtest.net provide a rough indication of your download upload speeds also your ping rates to different servers around the world a lower ping means a better online experience. But on a side note increased internet speeds will only but further improve online gamming. 
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