I played competitive HaloCE through 3 at a professional level. XBConnect is what people playing competitive CE used prior to halo 2 and xbox live. Game was playable up to about 60ms, with <40 greatly preferred. Hosts had a large advantage, but off host was very predictable, and required leading the targets.

The same advantage existed on LAN, with competitive tournaments setup to trade host advantage for team color advantage. The last in person CE lan I attended, we were playing on modded Xboxes with a patched version of the game that allowed a third box as a neutral host, and added an on screen timer. Happy to expand on the details if anyone is interested.