PSP version

Playing online last night (Finally managed to get the wifi to let me in)

My opponent took his turn which led to the death of one of his worms via a landmine, my turn goes by with everything moving at super-speed but i think nothing of it due to possible net issues.

My turn ends the landscape that was blown up by my opponent is replaced, his worm is alive, there are 3 landmines down instead of 1 and it's my turn again with the worm i just moved.

That was the first instance, second one was after my opponent lost a worm in the next round, this time the game froze for a few seconds and then all was reset back to before he took his turn.

Was is lag? or was my opponent cheating his butt off?

Sounds like the game resyncing after a big lag spike.

http://forum.team17.co.uk/showthread.php?t=34442

What you're experiencing there is the network pulling the game back in time to resynchronise to the last agreed state. It can be a bit confusing, but it's better than game over.

happened in quake2 all the time. though, there, it is caused by a prediction miss. similar issue, slightly different treatment due to real time vs turn based differences.