This can be extremely annoying in twitch-based online games such as first person shooters, as it will hinder one's aiming and shooting. Rubberbanding also plagues MMOs, particularily in extremely filled servers with poor hardware configurations. While it isn't as damaging in an MMO environment, rubberbanding still takes away from the overall gaming experience and if at all possible, should be avoided.
Adam: Nah, his ping's 834. He's just Rubber Banding.