Ever since I came back to 1.11b, I have been getting these crazy lags that freeze the game from 10-30 seconds. Sometimes, it's my fault (see the "bnet lag, oh wait it's my fault thread"), and sometimes, it's for whatever divine reason that Diablo god (demon?) decided to create.
Well anyways... because I have multiple trades setup, I figured that it would be highly beneficial for me to run Diablo in window mode. Thus, eliminating the screen resolution adjustment everytime I alt-tab between game and IEs. It works wonder. And something happened that I did not expect.
I no longer lag!! In fact, my game runs smooth. Yes, I still get the connection interrupted message occasionally (which drop you from game completely), but in terms of in-game freezes, I no longer encounter them. Also, my teleport seems to go smoother, and graphics seem a bit sharp too (I can actually see the little lightening lines that appear when you static monsters)
Now, I understand the graphic fix because of window mode, since I am essentially stretching Diablo to run in my awesome screen (j/k... it's only modest in quality, but still beat 7 years old technology by a bunch). Thus when I return it to normal it's comfortable 800x600 environment, I expect the graphic boost. However, I don't see the correlation between lag issues and graphics. I mean, one appear to be network serverish problem while the other seems to be the capability of your computer? Then again, I am no computer scientist (I gave that major up, lol) so MAYBE there is a reason behind it. Anyone knows why?
Of course, no matter how wonderful something is, there is ALWAYS some negatives attached to it. In this case, my 800x600 window mode Diablo is probably 8 inch by 6 inch. It's incredibly tiny; I can't change the gamma setting (so it's stuck in the gloomy gray mode); and each action seems to be a bit sharper, causing more chance for error (I teleported into monsters for at least 3 instance today, causing death everytime. A mistake that would be rare for me under such a short time span)
Oh, accidentally clicking out of bounds and causing the game to minimize is fairly annoying as well, but it didn't cause any death yet, so not an issue yet.
P.S. I found a 21% Maras under Window Mode. God bless window mode
So, IN CONCLUSION (what is this, college thesis?)
If you are having crazy lag problem like me, window mode might not be a bad fix for you. It helped me, maybe it will help you. (and according to college thesis rule, I should add an insightful message at the end of this, so *cough *clear throat *cough... here it is

If it rains outside, bring an umbrella!