My internet connection is way slower than yours and I have no problems. About 12 Mbps download, and a mere 1 Mbps upload. It's crappy by today's standards, but I have no problems playing Most Wanted or any other game online.
Sometimes the lag comes from other players, they might have a poor internet connection or a bad framerate, and that doesn't allow their computers to send the data quickly enough to the server and from the server back to your computer. That's what causes lag.
Most Wanted has some performance issues that are yet to be solved, which can cause lag too. EA servers might sometime be overloaded, I've entered one or two games before where it was impossible to play, just people jumping everywhere.
I've seen one player cheating, though. Everytime I would approach his car, he would just jump one metre or so in the air and stay here. That wasn't lag for sure, it was some kind of cheat. But I've only seen that once. That way, this player avoided any takedown, he simply hovered above anyone else.
