I\'ve a server/client architecture implemented, where all state changes are sent to the function, validated and broadcasted to all clients connected. This works rather well, but
If client see events happening at the rate the server is feeding him, which is the normal way to do it (I've worked with protocols of Ultima Online, KalOnline and a little bit of World of Warcraft), then this momentaneous 5 secounds delay would just make him receive this 5 secounds of events all at once and see those events passing really fast or near instantly, as other players would see him "walking" really fast for a short distance if his outputs delay too. After that everything flows normally again. Actually, except for graphic and physics normalization, I can't see any special needs to make it synchronize properly, it just synchronize itself.
If you ever played Valve games in two near computers you would notice they don't care much about minor details like "the exact place where you died" or "where you dead body gibs flyed to". It is all up to client side and totally affected by latency, but this is irrelevant.
After all, lagged players must accept their condition, or close their damn eMule.
The basic approach to this is something called Dead Reckoning and a quite nice article about it can be found here. Basically it is a predication algorithm for where entities positions will be guessed at for the times between server updates.
There are more advanced methodologies that build on this concept, but it is a good starting point.
Also a description of how this is handled in the source engine (Valve's engine for the first Half Life game) can be found here, the principle is basically the same - until the server tells you otherwise use a prediction algorithm to move the entity along an expected path - but this article handles the effect this has on trying to shoot something in more depth.
Your best option is to send the changes back to the client from the future, thereby arriving at the client at the same point in time it does for other clients that does not have lag problems.
The best resources I've found in this area are these two articles from Valve Software:
There will never be a way to guarantee perfect synchronisation across multiple viewpoints in real time - the laws of physics make it impossible. If the sun exploded now, how could you guarantee that observers on Alpha Centauri see the supernova at the same time as we would on Earth? Information takes time to travel.
Therefore, your choices are to either model everything accurately with latency that may differ from viewer to viewer (which is what you have currently), or model them inaccurately without latency and broadly synchronised across viewers (which is where prediction/dead reckoning/extrapolation come in). Slower games like real time strategy tends to go the first route, faster games go the second route.
In particular, you should never assume that the time it takes to travel will be constant. This means that merely sending start and stop messages to move entities will never suffice under either model. You need to send periodic updates of the actual state (typically several times a second for faster games) so that the recipient can correct error in its predictions and interpolations.