The Chunk Download Rate option limits the number of chunks the game will attempt to download from the server. If the client attempts to download more chunks than your connection bandwidth can support then the game may start to lag. This will often happen when you're in areas that contain many portals.
The Chunk Cache Size (in MB) option limits the size of the chunks cached locally. The more chunks the client can cache the less chunks it will need to re-download from the server when entering worlds, or opening portals to worlds, you've already visited.
To make sure you have a smooth experience:
Set the Chunk Cache Size as high as possible.
Set the Chunk Download Rate to not saturate your connection.
The debugging information includes, something like:
Chunk data received: 20.00/s 3.00Mb/s Peak 7.00Mb/s Rate Limit 30
If the number received (20.00/s) is consistently lower than the Rate Limit (30/s) then it's likely you should reduce the Chunk Download Rate.
If you're experiencing lag then we want to know about it. But we need to see a screen shot of the debugging information to help diagnose what is happening.
Please post screen shots including the debug information below when you experience lag in the game.
There are more details about this issue here: