Almost any gamer can tell you that online gaming is reliant not on bandwidth as much as it does on latency. The reason that your download rate was not the biggest contributing factor is twofold:
While you may be able to download at 1200Kb/s, your performance in games like Call of Duty on a server that is located thousands of miles away may leave a lot to be desired, because it takes too long for the data to be processed back and forth between server and client.
The size of the “packets” in gaming traffic has always been pretty small in comparison to almost every other kind of traffic. It is much more reliant on sending multiple tiny packets in a constant two way steam as opposed to delivering 1 large file.
But now I am going to throw a spanner into the works and tell you that your bandwidth is becoming more and more important that just pure latency. As gaming is getting more complex and detailed, hard-core games such Call of Duty black ops and World of Warcraft need more and more bandwidth to deliver all the features that combine into the perfect gaming experience.
Stats and friend tracking, logging theatre modes, in-game and 3rd party voice over IP services, Digital delivery services with community friends lists, IM clients and all other applications that the modern day gamer utilizes to maximise his or her gameplay have an effect on the in-game experience. While each of these on their own require very little bandwidth and can operate at full functionality & capacity on a limited connection, when combined on a “not-so-broad” broadband connection, congestion & bottlenecking starts to become a really big problem.
So with this in mind, here are my recommendations on the minimum type of ADSL connections that you will need depending on what kind of games you want to play.