It happens and we all know it. Sometimes it's the server, sometimes it's other things. Sometime's it's even your system. Here is some great articles on lag that can be really helpful.

http://wiki.secondlife.com/wiki/Help:Lag Explains lag and gives a few points to help with it. '

http://wiki.secondlife.com/wiki/How_to_reduce_lag Great article on reducing lag. Believe it or not, even when it is the server, just following these steps actually helps reduce your own lag and lag on the whole sim. Why? Because if you say...cut your draw distance down to 64m, suddenly that's less for your computer and the sim to communicate. Say you have your bandwidth maxed out to the full bar? That means you are getting alot of data, but sometimes more than your pc knows what to do with, so the server works harder to get you the packets. Really good read if you all are interested.