Yep, all good points Kal (and I'm a network Engineer by profession, so believe me I like to look into this type of stuff in quite some detail). All very plausible, although the client/ server interaction is rather more complex, and (as players) we're not privileged with all the details we need to make educated analysis of exactly what's happening.

Interestingly, a pretty thorough packet analysis of my PS3 traffic using Wireshark didn't indicate anything especially conclusive network-side, although the game traffic is carried over UDP, so it's not as if we're going to see a horde of resend requests to help us narrow things down...

In any case, the lag element could actually be introduced by a wider variety of elements than just my or the enemy's internet connection.
Their PS3, for example, could be struggling to process the game. Or mine could. Or (rather more likely) both could, plus a few other factors. The progressing nature of the problem would tend to support the theory that the problem is at least partly client-based, though, indication something along the lines of a memory leak. We've had this before in early beta, you'll no doubt remember, and some bugs were were found and corrected.

But Dust is a complex beast - it's entirely possible (indeed likely) that other such errors still exist. So I'd argue that the best solution is in fact to keep reporting this stuff as we find it. After all, we're all here to improve the game experience, and there's not much challenge in a FPS game if you can't be hit by enemy fire, any more than if there are enemies you can't hit.

When I get this, and it's rare, it usually has to do with graphics loading in during play. Or perhaps it's because I have a first gen PS3 that this is a very rare occurance for me.

Things that might help.

Make sure your PS3 HDD's file system is defragged. It's helped my PS3 immensely. This will help shorten loading times. There are instructional pages and vids all over the internet.

By default, the HDDs Sony has installed in the PS3 are 5400 rpm. Upgrading to a 7200 rpm will also help shorten load times. If you can afford it, a 10,000 rpm, SSD, or HDD/SSD hybrid will really cut down load times which does include graphics loading while in a match. I need to upgrade to a 7200rpm myself.