I did a little test yesterday in the arena on my barbarian ymiraku with my buddy on. Anyway I play on around 350 latency and he plays in canada at 80ms latency.
I got him to jog in a straight line and i jogged along behind him right up against his character, actually touching the false sprite of his toon. Anyway when i asked him how far behind i was he said i was at polearm distance, about 2 squares of the arena behind him. In order for me to be next to him i had to be more than an entire tile in front of him on my screen.
I did the same test with us sprinting, and he reported that i was about polearm + 1H distance behind him even though i was touching his character (not in a weird way).
Funcom why cant you introduce a catch up mechanic to help players who are on high latency? other games have this technology like Rift and LoL, basically where i attack them on my screen should be translated to their actual location on the server. It doesnt make any sense, in Rift i play on similar latency but i can be behind someone when they are running and still land everything on them.
Understandably a mechanic like this would be easy to hack, which is why this game needs a sort of punkbuster implemented into it to prevent players from abusing the mechanics.
If Funcom was serious about this game being a continuing success they would have implemented better anti-lag technology after the server merges.