Actually we cant (=won't) "rewrite" the netcode of UE3, also the netcode is very well and way easier to detect/prevent cheats as it is on the W3D engine.
For sure we can change some parts (like making more at the clientside), so it will be faster, but we wont, its simply because we dont have the time, but we will optimize (some parts) so it will be fast enough to enjoy the game without "lag".
Also the lag that was caused in our UT3 version, is not really all lag, the char animations are not really ours (using the UT3 once seems like lag/hopping to me), sometimes the server is overloaded (like it was last time with 20ppl) and so on...
PS. nowadays its totally nonsense to discuss such things, as nearly everyone got a fast connection, wich can handle up to 32ppl on the UT3(version) without lag at all (just need a moderate server).