There's a difference between these things...
A bit of shakiness lag... the kind you see if you're an American racing with someone in New Zealand... especially you can usually see it in replays, where the other person's car doesn't look as "smooth", but often you won't even notice it in the race. Well that's one thing.
But that "Car goes crazy with lag" issue is something ENTIRELY different.
That's a lag spike or lag bombing.
And that could happen with anyone racing with anyone from anywhere.
Lag bombs or lag spikes are caused by someone's connection being interrupted or squeezed during the racing.
And actually often it's been someone who's not only in my country, but I've seen it happen with someone I used to race with who was less than 100 miles away from me.
Like if someone on the same internet connection is STREAMING VIDEO at the same time someone is racing.
It's especially likely if someone uses WiFi to connect the ps3 to the internet. (Hard wire connection is always more reliable.)
Another issue might be if someone lives in an area where their local hubs are not up to par for the population they're serving. (This is common in some parts of the U.S. So definitely not a reason to think American-only lobbies are going to cure this!)
I regularly race with people on other continents and RARELY see that kind of lag bombing.
But when it has happened, we've discussed it.
Usually it turns out the person knew the cause.
Someone was trying to stream Netflix in the house during the race.
Someone was connecting through WiFi at their university house while a bunch of their roommates were home using the internet at the same time.
That sort of thing.
Also, if someone's modem/router has become corroded or otherwise deteriorated over time, they might have problems.
I recently had to replace the modem/router, and remove a piece of hardware being used.
So basically, what I'm saying is there's no reason to become xenophobic about racing with people from other countries or a certain distance.
Because racing with only Americans is NOT going to guarantee you won't ever see lag, have compatibility problems, or have someone lag bomb their way around the track.
Furthermore, I have known people from Brazil, France, Italy, and Japan, who had American flags next to their name in lobbies. It's entirely possible to get an account from another country. So you're not going to guarantee that kicking everyone with a different flag is going to keep out foreigners either.
Also, in fact, in Quick Matches, MOST of the time I've seen people lagging really badly... it's been Americans & Canadians. And just recently I suspected one of doing it totally deliberately.
Some people know they're lagging, know how to make themselves lag (choke their internet deliberately), and do it on purpose as a form of
griefing.
I have suspected this since I've seen references to this on this forum, as well as in lobbies.
One time in a lobby I saw someone demonstrate how they can make themselves lag. So that's totally possible.
Though MOST of the time the person is a newbie to online racing, and doesn't realize that if they see EVERY other car lagging - the lagger is them. *sigh* So sometimes those people need that pointed out to them.