Lag switching (standbying) is when the host dissconnects from the intenet for a few moment. In this time the game continues to run for everyone except all other players are no longer connected to each other. So everyone will continue to do whatever it was before the host disconnected (i.e. walk in a straight line). Players can kill each other, but it only apears so on their screens that they are killing each other.
Once the host reconnects everything will "update" to what ever was happening on the hosts xbox, So just like the players can kill lifeless and straightline walking opponents, so to can the host. THe only difference is that what happens on the hosts screen actually happens.
An example is that you meet the host, pick up a rocket launcher and blow him to pieces. The host may not have even looked at you or responded to your presence. This is because you never picked up that gun.... you never fired a shot at him.... and you never killed him... That was all on your screen and the host was probably standing in front of you the whole time beating you up with melee attacks.
I hope this helps those that are confused =D
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