Network Problems...

So here is the deal, I'm having network problems obviously...I'm not entirely sure what my network speed is but I'm pretty sure it's mediocre speedtest.net tells me 4.8 Mb/s for upload and 0.88 Mb/s for download with a ping of 17. When downloading It usually stays at 400 - 700 kbps. However the problem occurs when gaming, although there as well I usually witness a latency of 30 - 50...So I don't really understand..

Onwards to the problem
Despite these indications every 10 minutes or so in-game (playing MMORPGS WoW and what not) while in combat I suddenly stop up and everything around me stops and I can't move, other players stop, NPC stand still, damage comes to a halt, just movement in general but I can still look around. Then all of the sudden 3 seconds later everything speeds up and seems to catch up with everything that just happened in the last 3 seconds. Of course this is extremely annoying considering I need to be up to date on everything when raiding with a party in-game. Other instances of this is when I talk on skype with friends, again intervals of 10 - 15 min all sounds from my friends on skype stop and gets chopped up for a few seconds and go back to normal afterward. Then when it comes to the Shooter games like Counter-Strike and MW my latency is pretty ok, 30 - 50. Here the situation gets even worse, every 2 minutes or so, again my character stops completely up in the midst of action and the frame stands still for a few seconds, here again I can still look around but not move and nothing else moves and then suddenly, like before everything speeds up and I see characters fly by me an I usually end up dead..

So could anyone tell me what might be causing this or if there's a name for this problem.. I've heard someone mention "packet loss" or something but I don't really know much 'bout networking.

However this is on my desktop PC, which atm is connected to my wireless router with the help of one of those USB dongles, D- link or whatever that you insert in the back. I'm not able to get a wired connection in my room without pulling a wire halfway around my top floor..and I'm a bit skeptical doing so cause' I've heard that the longer the wire the more loss you get. So I'd have to pull the wire at least 7 - 10 meters...

Basically you shouldn't use wireless for gaming because it is almost always half the speed of wired.

If you must you should try to optimise your reception and avoid interference.

1) raise the router above furniture level
2) Experiment with channels (some will work better or worse depending on your environment)
3) If you can detect strong neighbouring wifi, use a channel 5 stops away from strongest.
4) Relocate cordless phone base or video sender etc.
5) Be prepared to move the computer (or at least turn it so your body is not between the router signal and the wireless adapter's antenna.