I guess I should actually start a topic on this now that the netcode has been patched again.
Last night I was able to have some very smooth matches with some SRKers. A fair warning though. Red bar matches WILL STILL LAG. Not as much, but it's a nuisance. So anything yellow and green is great.
I don't know if this applies to the PS3 version as well since I don't have it, if someone could verify this that would be nice.
I'll be giving this new code some serious testing, but for now it's worked like a dream.