Well its not even playable.. they didn't even try making the netcode decent. Just had a lvl 2 connection vs a good mai and I couldnt touch her.. Guy knew how to take advantage of the lag pretty well. I am so depressed atm. My copy is going back on the shelf. Every time I watch a tournament I get hyped and pick up the game again. Seriously this was the last time. Only enjoyable connection I have is with fluke it. It has lag but at least it is playable and enjoyable. For some reason connections that are closer than fluke it are a lot worse. Dunno the netcode is fucked up..
Honestly, I can't say the netcode is 100% unplayable, I have very good enjoyable matches with some 4 bar players, but it still has some annoying delay to where I can't properly react defensively. I don't touch anything under 3 bars. But it is very hard to find good blue bar connections at all. Anything under 3 bars, I will say is unplayable.
When it comes to lag, different people have different notions and definitions of what is playable or unplayable. Some people say that KOF98/02 on GGPO is SHITTY and unplayable at all, no matter how good the connections or latency is, while many people believe that GGPO is the best netcode made in the world.
Some people said that KOF02UM on XBL was playable while I thought it was horrible.