No, console kids, you aren't crazy.
Team Fortress 2, part of Valve's epic The Orange Box compilation that was released last week, is experiencing some serious lag issues on Xbox Live. The vast majority of complaints stem from gamers attempting to participate in more competitive 6v6 or 8v8 matches, where "connection to host lost" messages became common place or gameplay rendered completely unplayable by never ending lag.
Valve realizes things are amiss, however, and told 1UP the studio has already dispatched a title update to Microsoft. Unlike the PC world, patches are not immediate and the hopeful remedy has to make the rounds through Microsoft's certification process and through the Xbox Live pipes. Valve anticipates the title update will arrive in gamers' hands either sometime this weekend or early next week, but no specific date is available.
Valve's networking experience is on the PC, but you have to wonder how an multiplayer-only game gets released with online networking issues this severe? Valve worked on The Orange Box for Xbox 360 internally, and with so many competitive multiplayer games available -- and more on the horizon -- if this issue isn't nipped in the bud quick, it could leave a permanently sour taste in gamers' mouths.
Expectedly, this does not appear to be an issue in the PC version.