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Lag compensation exists and is completely fixable if you know how to change your router settings. Lag comp. only really messes with people when your connection is faster than everyone else's. So if you go into your router and change the port priorities so that it slows down your xbox connection you will see a lot less lag comp.
You can google this and find out exactly how to do this.
I know enough about networking but I will say this. I pay for 37 down and 6 up and I'm gonna use that. I'm not lowering it because others have crap connections. They need to upgrade of stop pairing me with them. This game is supposed to be ping based but so far I've had some sort of lag in 90% of my games. Yes, its fun still but also unacceptable.
Lag comp is what's killing this game for me. I want to like it, I really do. When I'm not getting screwed over by lag comp I have a blast but when I shoot someone 6-8 times and see hitmarkers appear, only to be shot 3 times and die instantly, it makes me rage to no end. A few of the maps in this game are meh at best, but the only thing that I truly hate about this game is the lag comp.
Playing: Black Ops 2, Gears 3, Skyrim GT: Brutal Warstorm