I can say something only to the delay in walking/flying/running etc.
It's basically the delay between the time you press the button, processing time on your computer, the transfer time to ll in San Francisco/U.S. somewhere, processing there on the sim, transfering the data back to you, and last but not least rendering the data in a couple of new frames on your machine (Synchronization between the clients and the server sim is actually more complicated as that, but now it's good enough to give you a rough knowledge of who are the ones that introduce this delay).
This is the actual delay between typing and seeing it, your ability to react on things you see and, if it is high, is really deadly during battles of any kind. A european player might loose his head against a U.S player even before he had the change to see whats happening and to press the right button. It's like a senior resident in a wheelchair
if you have a high reaction delay.
To get some information for diagnosis what introduces your delay, you can open a diagnosis window with Ctrl + Shift + 1 and see there, more or less in the upper third how your framerates and how your ping time between you and the sim (ping sim) and the sim and you (ping user) is.
If your machine produces a very low framerate (e.g. below 5 fps), you see only parts of your movement and can't actually react to the position where you really are. A faster machine will smoothen your movement so your are better able to react. In the meantime you can adjust your drawing distance to a lower value ( 128->96, 96->64), and reduce your quality settings to get more frames per second.
The ping time (or round trip time) means the time between the sender (e.g. the sim) and the receiver (e.g. the client) and back again. Ping time as in the client diagnosis are not comparable to the values you get with your windows ping tool. I don't know, what delay the sim introduces to this calculation, someone who knows might further point out here.
This ping time between you and the sim delays your reaction. Users in the U.S have a ping time of approx. 100ms, europe is about 200ms or more away, and otherwhere depends on the distance between you and ll and how your isp is connected to the states and the internet connection you are using. A thing to check (e.g. new firmware) is your broadband hardware (dsl modem/dsl router/cable) and your internet connection should have enough bandwidth for sl and not share it with any heavy exchanging p2p software. This can introduce further delay and spoil your experience.
If your network connection is bad to ll, you can't do much about it (as long as your isp operates fully) except changing your isp with a better connectivity to the U.S. Furthermore if you have DSL, you can ask your provider if they can switch off the DSL error correction (here aka fastpath) on the last mile for your DSL access. This gives you a significant gain because your DSL connection introduces the most delay in ms/mile during the travel to ll and back. For me, in europe on an average dsl connection, the raw round trip time measured by windows ping takes 50ms in my city and altogether to ll and back 225. I loose in my city roughly a quarter of being able to react.
Where I live, using fastpath to reduce the local delay, costs an initial fee and a small fee every month and is especially used for online games. Not all ISPs are offering this.
If you can't change your provider or get fastpath, get used to your reaction experience
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Just to note, if your avatar is only able to turn around, but doesn't move forward or backward or any other interaction with the world, your connection might be screwed. The diagnosis window shows then (at least for me) values of ping with 10000ms (as I remember, an abnormal high value). This won't change, you need to relogin then.
I don't wanna forget that an overloaded sim might reduce your ability to move too. But there are plenty of lag experts out there better than me. They can tell us more about their *lag experience* on sims, I am sure
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