Does WiFi create more lag for online gaming compared to playing connected with a ethernet cable?
Wired is better IMO because of potential for things like interference etc. However, I have been to many XBOX 360 LAN parties that used WiFi and we have never had a problem with LAG either locally or online. If you have a solid connection, the WiFi connection has plenty of bandwidth for lag free play. Where you might run into a problem is if you have every single thing throughout your entire house (other consoles, PCs, DVR's, Blu Ray) running on the same WiFi connection. However, just by tweaking priorities on your router you can eliminate that as well by giving your console priority with the bandwidth.
However, with High definition content being bandwidth hungry, that is where G is starting to show it's age. You need something that can pass alot more content without bogging down your connection. That is where the N router comes in. The N routers are built to be able to pass enough bandwidth for High Definition content streaming. I guarantee you lag won't be a problem then. I simply would not worry about lag issues with WiFi unless you have some out of the ordinary circumstance.
If you have an ethernet connection next to your console...I say use it. However, if you don't, I wouldn't hesitate to add an "N" router either.
