It's not as bad as some people claim it is. Although it can get quite choppy the match usually doesn't freeze up for more than one second. It can mess up moves that require a lot of accuracy and timing. (such as Ness' PK Thunder Recovery and Luigi's Flaming Uppercut)

But if you're lucky enough to have a really good connection (like the one I had when I first versed ljkkjlcm9 online) the matches are so smooth you probably wouldn't be able to tell that it was an online match since it's just as smooth as an offline match.