That's just normal lag, it tends to manifest itself that way because it's what you notice. If you're playing solo you actually have lag too, you just don't really notice because there's no frame of reference to compare it to.
You can try the stuff in the lagging section of this thread:
Error Solutions, Game Downloads and Manual Patches
The VLOW Pie mentioned is explained here:
Run your Latale Client on VLOW
and the thread on how to actually enable it nowadays (thanks to the new launcher crap) is here:
How to enable VLOW Post-Hell's Door Update