Ask any gamer about how they feel about lag in online gaming, and they'll probably want to throw something in lieu of an answer. It might not be possible to eliminate lag entirely, but Microsoft researchers are toying with a way to mitigate it by trying to guess your next move.
The experimental technology, called DeLorean, is what Microsoft calls a "speculative execution system,"and it uses a mix of predictive technologies along with time-shifting and bandwidth compression to "[produce] speculative rendered frames of future possible outcomes" ahead of time to reduce apparent lag resulting from network latency.
The idea here is basically to try to anticipate your next actions in a game and to reduce overhead in order to mask the lag. According to Microsoft researchers, eliminating network latency lag is not practical, and that even with a fast wired residential Internet connection, you can experience over 100 milliseconds of lag--enough of a delay to frustrate just about any gamer.
Even in this experimental stage, DeLorean can mitigate up to 250 milliseconds of lag caused by network latency when playing cloud-based games, according to researchers.
To test the system, Microsoft researchers created modified versions of the games Doom 3 and Fable 3, and found that "players overwhelmingly prefer DeLorean" over standard, lag-ridden cloud-based gaming, and that "DeLorean successfully mimics playing across a low-latency network."
DeLorean is still an experimental technology, so you likely won't see it integrated into commercially games any time soon. In the meantime, you can read the research paper if you are so inclined.