Why should we? When my friends and I play Halo 3, anything goes. Light jabs of trash talk ensues. That's what makes it fun.

I admit I'm guilty of that sometimes, but that's part of what makes split screen multiplayer so fun!

No, that's what makes local split screen fun. I don't get the games on WiiU that put one player on the gamepad and one on the tv. Then it's cheating. Online racing with a friend is pointless as you can't see each other. Much easier to wait for each other and actually have a race in split-screen. Plus missing the fun of watching the other player crash is no good.

Do you consider it cheating when you use sound to locate another player? We used to play Duke Nukem 3D a lot in LAN network. The game has plenty of audio cues to figure out where someone is, which made it a lot more fun than trying to find each other in an online match.

Of course it's cheating.
Although, it's hard not to look some times. Especially when my brother earns a penalty on Pro Evolution.

not just split screen, even playing on computer shops with friends, someone really looks on the other monitor, so regardless on where the monitor is for your opponent, it is really cheating.

you would know where he is located and it can become an advantage to you.

Mario Kart encouraged this so i say it depends on the game. In Mario kart since the developers encourage it, its fair... can't say that goes for all games though.