Bouncing Boats

I've got some boats, that move using physical movement (not setpos).

Riding them works perfect.

Watching them from a distance shows them sometimes lifting up out of the water, and dropping back down. The farther away the bystander who is watching, the more dramatically they will see this bouncing (sometimes 10, 20 meters up.) But the rider sees none of this. From their perspective, all is smooth.

I assume this has nothing to do with relativity or quantum physics!

I've heard this happens because the SL client, rather than getting the full data from the grid and sim all the time, also uses some prediction, and draws frames the way it thinks they will be. So the client shows the boat lifting up in its frame displays, and once it gets the updated real situational data, puts the boat where it really should be (drops it back down).

My questions are:

1) This sound right?
2) What can be done about this? Does some vehicle parameter tweaking help to mitigate this, or is it all in the hands of the SL client?

Rj