There's a profile of Tony Cannon and his GGPO software on Gamasutra where they describe the origins of this software to overcome gaming latency as a personal battle by a fighting game enthusiast to overcome the lag that impedes gameplay in twitch-oriented games. This has been successful, as they say the software will be part of several upcoming games, including some projects yet to be announced. Here's a bit on how this works:

Cannon started thinking about how he might fix these problems for timing-dependent games like his favored fighters, and came up with an idea he calls rollbacks. Instead of inserting any internet latency between the button press and the start of the move, his technique puts the lag on the beginning of the opponent’s move, with filler animation to hide the effect somewhat.

"That’s actually way better. You might see a little glitchiness, but all your timing is the same," he said.