I think the online is pretty good, but I definitely feel the delay. I'm a woeful 6-9 right now I went 2 or 3-1 and then hit the skids huge.
I blame part of it on the lag (not much... maybe one or two matches it made a difference), but more of it is the controller. The D-pad is bad enough, but I tend to sit the controller on my leg and use it like a joystick as best I can... thumb on D-pad, fingers on buttons. I think frequently I wind up accidentally pressing a trigger, which seems to nullify whatever it is I'm trying to do (either that or the lag really is bad).
Once again, anyone have any advice on a good 3rd party controller? The Hori stick, as far as I know, is simply not available in Canada.