newbie question: How to reduce lag in fs2004 online play

Hello I flew FS2004 with my friend via direct ip connection. But despite both of us using ADSL internet 256kbs and 1mbs, our virtual plane jumps around rediculously when get close together. I mean I see my friend's plane bouncing to the left.. right.. back.. front of my plane that it gets rediculous and my friend reporting seeing the same. Hence, is there a way to reduce such laginess? some command line switch or any techniques? Thank you.