Basically, most of your latency comes from two places. The first is the speed of light in optical fiber. You can't do anything about that. Not even Einstein could.
The other is the two modems involved in the 'last mile' of your internet connection. And, unless you're a modem manufacturer, you probably can't do anything about that either.
The thing that causes modems to lag for gaming is:
Modern modems send their data in packets. (When error correction or compression is turned on, or the modem speed is 28.8 or higher.)
And internet protocols are also in packets, of course. Generally, TCP/IP over modems is sent using a format called PPP.
The killer problem is, the modem doesn't know when the PPP packet ends. So it sits around waiting for more data to fill out its own packet. Eventually (20 milliseconds? 50?), the modem notices that it hasn't received more data for a while, so it sends a small packet.
If modems would parse PPP packets for length, or even just send their own packet immediately when they see the PPP end-of-packet character (ASCII 126, tilde), those milliseconds wouldn't be wasted.
Unfortunately, no modems do this.
Alternately, if a modem had some out-of-band way to signal it that it should send any queued data right away, that time wouldn't be wasted.
No modems do this either. It's a crappy situation.
If you're playing a twitch game that doesn't send all that much data, you might be able to improve things by
lowering your modem speed to 14.4, and turning off error correction and compression. But if the game needs to transfer more raw data than 14.4kbps can manage, you're sunk anyway.
(By speed, I am referring to the modem-to-modem speed, usually 56K, 33K, or 28.8K. Not the 115200 port speed you mentioned. Leave that alone.)
Relevant:
The Latency Rant, a.k.a.
It's The Latency, Stupid.
Some ideas about IP networking, in the section
Multiplayer games and modems.
A thread on the linuxsa mailing list, dated 1999,
PPP and compression and 56kbps modems .
A discussion on a Linux-related forum, also dated 1999,
Reducing PPP latency.
The Hype About 56K Modems, sections 8 through 10.