You should play the game offline vs the CPU and hit f11 to display the emulation speed, it should be 100% or very close at all times. I doubt this is your problem, but believe it or not this is a problem for some people. They'll either have a piece of shit computer or a TON of other programs / processes running in the background, virus software, unhealthy PC's, etc. I wish there was a way to disqualify people if their emulation speed ever dropped below 98-100%, a lot of people would probably get weeded out lol. In my experience, the person with the better internet and hardware is usually the one who gets cheated.
One way to find out who's lagging is (if you're the host) type "/lagstat" in the chatbox, this will display lagspikes for each player. You really should try p2p though, its built into the n02 client also. Right underneath where you select your connection type, there's a "Change Mode" drop down box, you can change it from client mode to p2p mode. You can even join a p2p game without forwarding any ports, you just can't host. To host, you forward ports 27885-27890 in your router. That's what I do at least.