"Ping" is roughly the time it takes for the electronic signals to go from your computers dialup or ethernet card thru the wire and any other modems or electronic equipment and over the internet to the game server's ethernet card.
"Latency" is similar to "ping", but includes the time it takes for your computer to send out the signal (calculation/processing time), plus the "ping time" it takes for the signal to travel over internet to the server's ethernet card, the time it takes for the game server to calculate and process the signal. Also, plus sometimes, send out a response to your computer, and then your computer to reprocess it. Most people use the terms "ping" and "latency" interchangeably, but almost always your latency is always higher than the ping times.
"Lag" is "extra delay time" that gets added to your latency time because of one or several reasons. "Lag" can be caused by the client computer, your ISP, the internet, the game servers ISP, or the game server.
Lag can be cause by many things on your computer : software programs loading your CPU while you are also playing games, software programs also using bandwidth over the internet during games (like ICQ, MSN, downloads, etc), not enough RAM in your computer (~128MB or more is needed), incorrect Window settings, incorrect modem settings, incorrect Firewall software settings, loose physical wire connections (causing packets to be re-sent), older/slower computer's CPU speed (MHZ or GHZ), your modem/modem settings, IRQ conflicts, etc, etc.
Lag can be cause by many things NOT on your computer : bad connections at your cable/phone company, your ISP might be over loaded at night during peak gaming times, routers at your ISP might be mis-set, other routers on the internet might be mis-set, the game server's ISP might be overloaded at peak times, the game server's ISP might have other problems, and the game server might be over loaded, etc, etc.
The more the bandwidth of your internet connection, the lesser wud b the latency...n play on only indian servers...the less the distance from the server, the lesser will b the lag...n while playing CS 1.6 try not to download anything simultaneously...
Change the following in your console:-
cl_updaterate 100
cl_cmdrate 100
rate 20000
fps_max 101