Other HPB Hindrances
Bouncing Around
Another point to remember is the path that your data takes to get from your computer to the game server. Rarely are you put in a situation where you're directly connected to the server (unless you're on LAN). Since you're not directly connected to the game server, your data bounces from one router to another until it reaches its destination, the game server.
Each bounce from one router to the next is called a "hop." Bear in mind that improving your connection only speeds up your data transfer rate from your home computer to your ISP's server. That's just one hop. There's still a bunch of hops that your data must take between the ISP's computer and the destination. Granted, the transfer rate and "ping" between your home computer and your ISP's server is usually the biggest bottleneck (using a modem adds 100ms overhead at least), but improving that transfer rate will not reduce your ping to all servers.
If you're trying to connect from the USA to a server in Europe, you data will invariably take 20 or more hops to get there. If we estimate that each hop takes an average of 20 ms, then 20 hops x 20ms means that there's an overhead of 400ms latency that is unavoidable.
Packet Loss
Another major factor that determines lag is packet loss. To understand what packet loss is, we should first explain what packets are. Basically when your computer communicates with other computers, the data is not sent as a continuous, uninterrupted stream, like water out of a garden hose. Rather, data are sent in discrete "chunks" or packets, more like boxes along a conveyor belt. So if your computer is experiencing packet loss, it means that you're not receiving or delivering a steady stream of packets, analagous to boxes falling off the conveyor belt.
It's easy to see why packet loss can play havoc with your gaming experience. Without a steady, reliable stream of data chunks, your computer is forced to "fill in the blanks," which can result in chop or skip in your frames. It is in fact possible for a person with higher ping (HPB) to experience smoother gameplay than someone with low ping (LPB), if the HPB has zero packet loss and the LPB has immense packet loss. Ping isn't everything.