*edit* this post applies to issues brought up in the SRP thread. Sorry for any confuzzlation.
Odd. I have the worst connection on the planet, my pc maxes out the processor on one single PS (not the 1.5 gigs of mem, though), and I was dual clienting. I had little problem with lag. The game ran smooth enough to see all of the fight with both characters. However, I made sure to turn off the sound, set to a small window, and cut the distance down to less than 40. I believe the greatest lag came from the client side, not the server. Be sure to minimize -all- you can clientside before going into a group of folks this large. Last count I was given was 40+ on Light, 30+ on Dark, 35+ Mobs. A good turnout.
As the the /challenge or /guildwar issue, I have suggested a /groupwar option to the devs also. This would allow anyone from any guild -or of none at all- to join in the battle on one side or the other (or maybe more than two sides). This would work just the same as guildwarring, only with temp Battlegroups. Options could be coded in to permit number of DR returns to the battlegroup, or not. Other options that could work would be Commanders and ranks. /challenge would be replaced with /attack, just as if your foe was a Mob.
Now, to prevent this from becoming a PvP spamming 'OMGzorZ comz jion my batle!!' kind of thing, I would suggest that a GM must give the Groupbattle leaders 'permission' to form the groups, and threads be formed explaining -exactly- what this battle was to be. Battles are EVENTS, not a way of life. Sometimes RP calls for them, but it is not needed for normal gameplay.
Also, it was fun after things came together (sort of).