At this time, about a month and a half after the game's release, lag is virtually non-existent. For those of you familiar with Ultima Online this statement may be beyond your comprehension.
Character development goes pretty slowly, which adds to the meaningfulness of each level gain.
For example, my best character, a Wood-Elf Ranger, became a magical being at level 9. The whole game could, in essence, be divided into pre-magic and magically able sections. My character could now heal and protect himself, and cast an offensive spell. At level 12 he gained the ability to meditate. Meditation, among other things, rapidly increases mana-regeneration, a once lengthy and boring process.