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Ok, I really don't know what's going on here, but I've been a 360 owner since launch and have used this product for years with no problems whatsoever.  I have a pretty fast internet connection (currently near 7mbps) and haven't had any lag issues.  I've played a number of online games fast and slow paced many MANY times. 

While it may be technically true that a wired connection is the best, the downing of wireless connections here as something unplayable (or even close) is untrue.  I'm proof positive of that.  Hope it works out for you as well.