regarding the issue about "dedicated" game servers i gotta disagree with many people. 97% of online games don't need dedicated server. Also a dedicated server doesn't mean the game play experience will be any better, smoother, or faster. After working on online games for about 7 years there's one thing the software online gaming technology can't improve, and that's network conditions.
It's honestly a waste of time using a dedicated servers for something that isn't a massively multi player game (I'm talking 64 players or higher)
And as someone who has been playing PC online FPSs since Quakeworld, as well as being a near full-time CS/DoD player, I can tell you this is so dead wrong it is ridiculous. Lag is a huge factor in playability of these games. In Day of Defeat : Source I can eviscerate anyone with more than 40ms ping using the sniper rifle, especially people standing still behind cover, since my client already knows there position (even if I can't see them yet), I can sprint-strafe them into view and snipe them before they see me. I routinely get accused of hacking because of this.
1) Most people's upstream DSL bandwidth is not sufficient to host 64 player gamers reliably, especially with voice.
2) Dedicated servers can sit at network peering points, minimizing the latency and number of hops to a far larger number of gamers, enlarging the number of users who can play together with low lag.
3) In many games, the user whose console is currently hosting has a latency advantage
4) Dedicated servers free up CPU resources
5) Dedicated servers help avoid NAT/Firewall issues that many home network users face and who aren't sophisticated enough to fix (and no UPnP and NAT hole punching are not solutions for everyone)
6) dedicated servers offer a more efficient, and more secure way of having shared resources
Honestly, even 32-player FPS games hosted from ADSL connections suck ass and I find it amazing someone with so many claimed years of experience would claim otherwise. If it weren't for the fact that consoles don't have mice, many more people would realize just how bad the lag is.