Just a few days ago I saw a dermorian running at a very quick speed. It was NOT lag, I could see his animation clearly, walking about 5 times my speed. No stuttering.
I hope I won't get in trouble for this, but I tested a program called "Speedgear" on PlaneShift for about 3 minutes. I successfully speedhacked the game without any difficulty. Of course, I didn't continue doing that!
There should be a hacking resistance in PS. I don't know how to implement this, but it would be useful. Programs such as SpeedGear, CheatEngine, etc. should be banned.