You are going to have to give some more information about your internet connection and computer config, cable - dsl - satellite or other.
Typically latency is not a problem caused by the Operating system, but since XP automatically detects most network settings, it could have caused a problem.
XP has always configured my systems wonderfully for the many network connections I have encountered. If you give more information about your connection, I am sure there are some wonderful people here on XP-erience more qualified with networking and latency settings that can help you.
There are some broadband tweaks for xp and other OS's at Speedguide.Net - search google for 'cable modem tweaks' and you should find something relevant.