If both sides had good connections. My connection is pretty good, but considering my distance to the rest of the world, my matches were always laggy. Same for Cap vs SNK2.
I'm sure it'll work better if people are geographically closer to you, which is what Xbox Live does. It tends to match you up with the best pipe you can get.
1 second lag is 60 frames. If that means anything to anyone.
Still... people don't get your hopes up yet! IT IS NOT CONFIRMED