DoctorYO,
While your network analysis is fine, your assumptions are not, IMHO. See, it doesn't matter how often I get updates from the server, because I get them from you, not the server. You are still thinking like a Quake Server Operator.
Ok, the server handles the updates, but I can still only get updates you send, and at the speed you send them. You can only get them as fast as I can send and you can recieve. Yeah it goes through the server, but the total latency of that process is the latency of the entire circuit, not just my part to the server, or from the server to you.
You are right, in that only HTC really knows how this is all working. I don't expec them to get into great detail in explanation because that is proprietary info. However, this is my understanding of how the system works. Hoof went into it a bit in this piece
http://www.rdrop.com/users/hoofj/netlag.htm which should be required reading for all WB/AH players. I believe AH uses a similar system.
The only thing I would add is that bandwidth is largely irrelevant. You can play this game on 19.2k connection, and as long as you have a low-latency/high quality connect, it will run just fine. That tells us that the ammount of information is not great. Also, the smoothing code and what not is designed to use this system, as is the server code. I would wager the update rate is quite low, and likely optimised for a 28.8k connection. So although latency will still have some effect on the total time-delay between two opponents, I think that effect is greatly reduced by all the other factors I mentioned above.
Again, the only situation in which I see a possible imbalance would be one where one person's connection has much higher latency outbound than it does inbound. Even then, unless that outbound connection was slower than a 28.8k modem, I can't see noticing a big difference.
I have a cable modem, but no regular modem. I'll install AH at my folk's place when I can and see if I can see the difference on a 28.8k connect. If anybody else could try that, it would be interesting to see your impressions.
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Lephturn
The Flying Pigs