I have lag issues too, it's because of the graphic card in my case...mobs that I think I'm shooting from far away suddenly appear in front of me :| makes it a bit tricky when I want to kite lol <.<
That's not graphic lag, that's latency lag. Graphic lag would be where everything is stuttering.
Here is an example of graphic lag
Latency lag is where if you were to click on a specific area in the game, there would be a delay between you clicking and your character moving. (This can also be input lag, but 99% of the time that's not the case)
With Diablo 3 there are two possibilities: The over saturation of servers is causing an increase in response time between client and server, which I honestly don't see.
Then there's #2 where the servers are struggling so much there's packet loss which is why you sometimes run and randomly fly backwards. The packet holding your new location was lost, so the server puts you back to the last location it had in it's list.