HALO server lag. Fios problem or hardware problem?

[DogInTheSand]

Hello everyone. I am new to the forums, and my skills are limited. I love computers and am always trying to learn more.
I have the Verizon Fios 20/20 package, and I take PC gaming pretty seriously. For the most part, Fios is great.
I have 2 PC's and the ActionTec MI424WR router. 1 of the PC's is set up solely to run a dedicated server for the game Halo. I was shocked to read the Verizon T.O.S. and see that I am not allowed to host any type of server.
When I set up the server, I followed the instructions on portforward.com to set up my router specifically for Halo. This included creating a static ip address and forwarding ports TCP 80, UDP 2302 and 2303. The server works, but I and all players are experiencing servere lag even with all pings at 33-150. The 33 ping is mine - should it be lower if I am sitting right next to the server? Surely Fios 20/20 can host a 16 player game of Halo (which only requires 56 kbps to play online). Additionally, the game is virtually unplayable on weekends, as it looks like a "slide show" for all who log on to the server.
FYI, the server specs are as follows: Compaq mobo, Intel Celeron 2.40 GHz, 768 mb ram (old pc3200), 80 gb hard drive. The hardware is pretty old, but it far surpasses the minimum requirements to run the dedicated server software. I am not using the server PC to play Halo, I use a different PC to log on and play.
I have read in these forums that Fios blocks port 80. Does forwarding the ports to my router "unblock" this port? A friend told me to install a gigabit ethernet card in the server, because the cpu and mobo are older. I did this and it didn't help matters any. I have since uninstalled the card and returned it to the store. The same friend said to disable the wireless function of my router, as a neighbor could be stealing my bandwidth (I don't use wireless). I did this with no result.
I routinely get speedtest results of 20700 kbps down, and 16500 up from speakeasy.net, with or without the wireless function disabled, so I don't think that I am sharing my bandwidth.
Since reading the Fios T.O.S. I am reluctant to contact Verizon tech support.
I should also mention that I have tried reversing the roles of my 2 PC's. Running the dedicated server from my slightly more muscular PC (Abit mobo, 2.45 GHz AMD Athlon 64, 2 gigs ram), and playing the game on the lesser server PC, with the same laggy results.
So, can anybody tell me if this is a Fios/router settings problem or a hardware problem?
Thank you for your help, and I apologize for the lengthy post.