As far as I can see, collisions with your car are done between your car and where your PS3 thinks the other car is but I think the positions of other cars are pretty close to where they are according to whoever is driving them (most of the time) the delay across the network can be dealt with as long as the acceleration/braking/turning remains constant with no changes.
But when you make a change in direction or speed that message takes a little time to make it through the network and in more extreme cases results in the cars visibly jumping around the track a bit.
Even in normal cases though there will be a slight delay in braking messages getting though even though not really noticable visually so from the person behind's point of view the car in front is braking slightly later than they actually are so the gap will appear to open whereas from the person in front's point of view the car behind will brake slightly later causing the gap to close.
That's all in my opinion anyway.
so answer is yes but it rarely happens in the middle of race's maybe the cars will jump around a little but thats mostly it
