your ram COULD be the problem, ti could also be your videocard, with DSL your connection speed should be fine
to check ram: Start > Right click my computer and click properties, look in the lower right, itll tell you your processor, speed of cpu, and ram. anything over 500mb SHOULD do pretty good, anything over 1gb should be lag free
if your like me (and using a weak ass video card) that could and is at least part of your problem.
to check videocard: start > Control Panel > System, then look for your video card, google the name of it and find out how powerful it is.
also, diabloII loves lag, im not 100% sure why but i think its cause of the version of DirectX that it uses, diablo 2 always lags to a point.