How to reduce lag

What Nagle's Algorithm does is prevent your machine from sending really small amounts of data and, thus, reducing traffic. There is an overhead to data your machine transmits and that is 40Bytes per message (assuming TCP and IP). If you only have 1Byte to send and the server hasn't confirmed it received your previous transmission, Nagle's Algorithm will hold that single Byte until you have more stuff to send or the server confirms your previous transmission. This prevents you from sending a 41Byte packet with 40Bytes of overhead and 1Byte of actual data.

There was a good example I found yesterday, but can't recall or locate, but it goes like this:
Let's say you're writing a letter to someone. Nagle's Algorithm keeps you from writing a character, putting it in an envelope, and mailing it individually. It makes you wait until you've finished writing the letter before mailing it.

The way Ethernet works is it waits until your network has nothing on it before it transmits. So, if you disable Nagle's algorithm, there will be more traffic on your network which could reduce its performance when you include those other people. That said, Nagle's Algorithm already conflicts with other forms of traffic control on the network. NOTE: As stated on the website, online gaming requires everything to come and go as quickly as possible, Nagle's can prevent that from happening. I'm not saying it will always keep that from happening, but the delays associated with waiting for a server reply or for more data to send can have a negative impact.

The fix I posted messes with the Registry. So, as with all things like that, you can royally screw your machine if you do it wrong. If you want to try it, make a backup of your registry, apply the fix, and see if the other people on your network notice a difference.