Well, I don't know where you live. Here's what your phone company if you are in the US will tell you...we do not guarantee data communications beyond a speed of xxxx (probably 33,600kb).
You're not really seeing lag, or data rate transmission, but packet loss. That means everything you do on the Internet is going to require the data be sent, then resent, then resent.
Now, that particular test you did could have been a one time thing due to network congestion, so I wouldn't get too freaked...I would be surprised you could maintain a viable internet connection with that kind of packet loss.
If you are noticing "lag" only in game play, I suspect it was a short term issue. Ping is only part of the equation.
All you did was send four little packets at the google server and it echoed them back.
What you want to do is ping your game server, and better still, tracert the game server.
See how far away your ISP is from the Interent backbone.
You may need to adjust your receive window for a dial up, since XP is optimized for networking, not dial up.
Update your modem drivers. Get a hardware modem, not a software.
Check the condition of your phone lines..I rewired my house with shielded phone line when I moved it for all data communication lines.
Check alternative dial-up numbers...I have three numbers to call in a village of less than 2000...surely you have more.
Who is your ISP? Change it.