That's exactly where I generally see lag, in arcade games with lots of players at high speed. If a net packet is a bit late, and the plane is doing 600kph and turning at what would be about 11 g's, the difference between where the client thought it was, and where the server says to put it instead, is a lot more noticeable.

Lag is also usually caused by the server being overloaded, your 512kbits download is plenty. Most games send data server-to-client at about 60 to 100kbits/s and client-to-server often less than that.

I'm not sure how Raknet works, or if they have dedicated servers, if they don't, then your upload speed is the critical factor, if you host.

Yeah its so annoying. Fortunately it only really happens for mw if the host is in the US and lots of people are in the game. I usually end up last with 1 or 2 kills at most. Also sometimes I see people who I know are good players do very badly, I put that down to mini lag too. If I want to continue to play with the same host, to combat the "microlag" I usually pick the me109G6 as you only have to get a couple of "lucky lag" hits to kill someone. Sometimes ive guessed a huge "Lucky lag lead" deflection shot and watched the target explode while my tracers have flown past waaaaay ahead of it.