believe me TvC doesnt play anywhere near as bad online as KOFXII does.  i havent played a fighting game this gen or maybe ever that plays worse online than KOFXII.  me personally ive had better experiences online but i have to say TvC plays pretty damn well online especially for a Wii game.  then again i play with a wired connection and i have my ports forwarded.  the majority of matches ive played have at the very least been playable. 

the problem with TvC is most Wii owners dont really play online so there connection to there routers is whatever.  where as people who own 360's for example make it a point to have a good connection because the 360 is built with online play in mind.  it all really comes down to your connection to your router and internet speed.  it also has to do with how good of a connection you have with your opponent.

dont worry though TvC plays noticeably better online than KOFXII does.  best part is its not half ***ed game like KOFXII.  the potential for KOFXII was great but you dont sell potential you wait till a games finished then you sell it.  as far as im concerned KOFXII was an over priced demo.

I've only played one game where the lag was bad. Out of all the matches I played it ran pretty smoothly overall. A few hiccups here and there but nothing awful.

i rarely ran into lag pre-patch tekken 6

My first night playing online, I had a bit of lag in a couple of matches, but most of the matches I have had were not lag plagued.  It might have been with the distance of the person or something else.  This was playing in "RIVALS".  I have played a friend one night and had a little lag in a couple of matches, but I think that might have been due to someone else using the computer at the same time.  Though the matches were pretty sweet on speed.  I enjoyed myself.

So far though, the best Wii fighting online experience has been in playing Teenage Mutant Ninja Turtles: Smash Up.  That has super good connections usually.  Though this TvsC game is doing quite well for me online.  Smash Brawl can have good online (even in Anyone Brawl) most of the time, though it is the worse of the threee I mentioned here in this post. 

I haven't had one really good match were things are smooth yet. Either it lags hard or just keeps dropping inputs to the point were I can't even dodge a simple projectile by jumping up in some cases.

I've only had ok matches so far. To be fair though I'm going to assume most people are using wireless connection and don't have a steady connection either. I don't think most have wired connection and probably aren't willing to spend the cash for it. I know I'm not, but I know my connection is good enough to play online considering I do play wireless sometimes on the PS3. Though I don't suffer from lag nearly as bad as I do in TvC.

Never played KoFXII so I can't compare.