Tetsuya, on 29 July 2010 - 10:26 PM, said:
two minutes of research would show you that Blizzard posters, including one of the programmers for the game, already posted how hosting a Battle.net game works both in SC1 and SC2 - one of the players is the host. The only communicating going on is from the players to the players (speaking game-wise, you're still logged into battlenet, but battle.net and the game use different ports and interact with the TCP stack differently, the 1k/sec or so keeping you logged into Battle.net isn't going to cause any lag unless you're on dialup). If all of the players are in the same room, your client isn't sending information to the Battle.net server and then to the clients - the info goes right onto the TCP stack, is sent to the IP address of the other players, and their clients communicate directly with your IP.
It's easy to test - even on SC1 - log into Battle.net, and as long as all the players are on the LAN, you will get LAN-like latency.
My roomate, for instance, bought SC1 for himself and his girlfriend a few weeks before SC2 came out - with Win7 they couldn't get LAN games to work, so they have to play over Battle.net to play with each other. They regularly ping 15-25ms, which is about the latency of the home network.
Battle.net isn't causing you magic lag. If ALL the players on are ont he LAN, you're communicating straight to the IP addy's, over the LAN. The information is not travelling to the Bnet servers - those use a separate port so you can recieve messages, etc, and aren't affecting your gameplay in any way. How old is your network hardware? A traditional family router is *terrible* for gaming - we regularly used to get 100ms of lag on the LAN until i upgraded to a dedicated switch. That's a lot more likely to be your problem.
I highly doubt that the lag was causes by the hardware that we used back in the day. We used to hold LAN games at a my friend's dad's graphic design business, he had a dedicated T-Line and all of the newest hardware at that time (1999-2001). We initially played games over Battle.net and connected to each other through there, we noticed some lag, and then tried directly connecting via LAN. We had far less lag through LAN. Regardless of what is being done, there is still some sort of communication to Battle.net going on, I would assume that has to be the issue. We also did LAN games at other locations, but that was our main "meeting area." The lag I speak of was not excessive, but there was a 0.5 (estimate) second delay in issuing commands to units at times, and we found that irritating. I am not saying that we had lag that made the game completely unplayable, I probably should have pointed that out. But the slight delay in units, occasional player drops, and sometimes a stagger, were only noticeable in our Battle.net games. We never had these issues through our Direct Connect games or LAN games, so in our case at least, it must be related to Battle.net somehow. We had similar results at the other locations we occasionally gamed at as well. We have not held LAN games for some time, this was back before I could even drive. But we did games often back then, and my memory is not very poor at all. As I also pointed out earlier in this post, our main location had all of the latest and greatest hardware of its time. There were computers there that cost more than some cars, and I am sure that the Internet Hardware (routers, modems, etc...) was not cheap either.
For the sake of the forum peoples, if you would like to continue our debate, you are welcome to PM me.

And if it comes to it, perhaps we can settle this over an SC2 match. You would probably obliterate me, especially since I have not played many games for a few years.