Latency is how fast your computer sends and receives signals from your online game. It can be effected by your internet connection and also the hardware and internet connection of the online game you're playing. Latency can be effected by many things.
1. If you are using wireless internet in your home and you're not using security other people may be stealing your bandwidth and because we all have a bandwidth limit of some kind he may be dropping yours low enough to effect your game play.
2. I've had bad cable and DSL modems cause latency issue on more than one occasion.
3. If you're using Satellite internet then toss latency out the window. It's 56,000 miles up to the satellite and back and at the speed of light that translates to 450ms delay which is unacceptable for internet gaming.
4. If you have more than one computer in your house and someone is downloading music, movies, etc. That can effect your internet enough to cause bad latency issues.
You need to learn how to check your own latency. Click on Start > Run and type in the command "cmd" hit enter. In the window you will type the following command and you can find your own sight that works for you, I just use google. "ping google.com -t" > Enter
This works like sonar in a submarine. It sends a signal in this case of 32 bytes of info to the web site you specified and times how long it takes the signal to return. If you're time= is somewhere around 80 to 105 then you're internet is running well. The old telephone modems ran at 250ms so getting up in that range is bad. You can also get blank lines that show no time. This is known as packet loss. It can happen when you have no bandwidth due to people stealing your internet or your ISP doesn't have enough bandwidth for peak internet hours or you have a bad modem. For this problem start by contacting your ISP and having them help you trace the problem.