Many FPS games use client side hit detection to get around some of these issues. In essence, your client tells the server if your shots were lined up on your target and reports the damage. Of course, thismeans damage you are personally taking is tracked from some one else's client (namely who ever is shooting at you). The lag people talk about in those games is often the result of this: on your screen you have entered a hall or rounded a corner while on your opponents screen you are still out in the open.

To the point: I have long wondered if FFXIV could use a similar system. Your client reports if you were in the hit of the attack to the server rather than the server having to poll your location. This would give everyone equal footing: assuming your machine itself isn't underperforming, we would all have the same amount of time to move. EX: Server tells your client that attack has initiated, client reports to server at end of cast if you dodged or not.