Have been trying to play arma over lan with a group of friends, keep encountering the same problem tho. I host the session Using one core to run the dedicated server and the other to run the game (which still plays perfectly smoothly) my friends all join the game, but when we are playing we all sometimes get the little yellow chain in the bottom right hand corner and while the game still appears to run fine, the AI and each other all appear to start to do random things like walk through walls or drive around in circles etc. After a few seconds of this (maybe 30 or so) the game just pings back into being normal again. everything appears to work fine again for maybe 2 or 3 mins then it occurs again. the chain only appears when crazy stuff is happening, and it doesn't appears thus far to follow a pattern, it happens whether we are flying around or standing around.
its almost like each player is being desyned with each other, but surely that shouldn't happen over Lan? and presumably my rig is enough to hold its own as a server?
My system is;
2.67 Ghz Core 2 duo
2 Gig pc 6400
Nvidia Geforce 8800GT
Any suggestions and comments are appreciated.