I recon playing within the same territory/region will cause less lag between players since the distance between them is shorter.On the other hand it would be a shame if it actually happens in Gran Turismo 4.The thought of playing against anyone in the world who has the game is quite pleasing.
However,if i remember correctly,a whle back KY said that the current GT4 Online Netcode isn't quite at the level that he wants it to be.There is still minor lag here and there and some of the cars aren't beign displayed correctly from a certain distance.If this remains unsolved he will not include the Online racing mode as those minor issues would lower the quality of the game.So,a possible solution would be to make it regional compatible only.It would atleast remedy the lag(a little if not completely).