Netplay

GGPO

Arcade emulator built around netplay.

RetroArch

...Someone should really try this out already.

RA uses GGPO netcode, it should be lag-free if you everyone involved emulates at fullspeed, don't live on the opposite side of the world from eachother and everyone has decent internet speeds.

Dolphin

Official Netplay Guide

If you don't have a very powerful CPU you may want to not even bother.