I finally found this thread so thought to add my experiences with the lag problem.
I am located in the UK Midlands. My ISP is Plus.net and my service ADSL. I am on Piken Square.
I started playing during the pre-release. Other than the login issues everyone had, everything worked well. Lag during busy periods was normal (i.e. a slight delay to everything) but it was tolerable and there were no spikes. I got best performance during this period.
Problems started towards the end of the first week and have gradually got worse. Like described in this thread, things can delay 10-15 seconds. You can start a fight and not see anything until it is over. I didn’t worry too much as I wrote it off as teething problems for the game.
I began trouble shooting anyway, checking my own connections and so forth. I was able to determine that my Internet connection was up and working during these spike moments. I concluded that the problem was probably traffic shaping or on the GW2 server. Patches were (and still are!) coming quickly and frequently so I decided to continue to wait-and-see.
My lag problems though persisted and now will always occur at some point during play. I sometimes get some very strange scenarios. On several occasions, I will find myself able to walk around. I can see other players moving about doing things so they are being updated for me. I can see monsters fighting. I am however unable to take any action, or they will suddenly kick in 5-10 seconds later at which point I will usually take a lot of damage all at once (and dish it out).
Sometimes, similar to above, I can see other players move but monsters are frozen. I can be taking damage constantly as if I was in a fight but I cannot see a monster and my abilities will not fire. It is as if the server thinks I am in a different position from my client. I often die in these circumstances. Inevitably, over time, other players and NPCs will also vanish from my view leaving me alone in the world, then suddenly everything comes back all at once. I’ll still be dead and will have to pay to teleport back to a waypoint (and repairs) or someone will revive me, at the location I thought I was in.
All this led me to believe it is not just network lag. There must be something else involved as I can’t see how some things in game appear to update but not others.
I notice that usually things will be at least tolerate, except slightly laggy – I can talk to NPCs, harvest, etc – but the serious spiking will begin the moment I join in a fight or a fight occurs near me. Then it becomes completely unplayable after a little after the fighting stops.
Things are more tolerable in “quiet periods”, e.g. Saturday or Sunday early morning or mid-afternoon. So it does seem to be related to server load in that it occurs more frequently when the zone/server is busy.
I notice even when the lag spikes were tolerable, it was not so much a constant lag but shorter spikes. It delays for half a second to a second, then everything happens in rapid-time. Repeat every second. Tolerable, but very noticeable. Then combat begins and the spikes become murderous 5-10 seconds or longer.
I have only had 2-3 occurences of being actually disconnected completely. Once when trying to enter a story instance from Lion’s Arch during a peak time.
I notice that relogging that sometimes clear things up if I was permanently lagged but it soon comes back. I assume this is because a relog disconnects and reconnects you to the server in some way (sorry – not too technically minded).
It is frustrating at the moment and I hope that the cause and a solution could be determined soon.
Addendum: Tonight 12-Sep-12, patched and I haven’t had any problems at all. Granted, I stayed in that zone just outside (north) of Lions Arch and it had been pretty quiet all night. But other than the odd expected splutter, I had no lag spikes or unusual behavior. Unsure if due to patch or just quiet zone.
