Personally, I haven't experienced any noticeable latency problems while using my PODxt, but have read on several Line 6 forums of others who have experienced this. So far, I have heard all kinds of different things, including hardware-based issues (soundcards & thier software drivers); connections (cables, USB ports); Line 6 software drivers, internal clipping, etc. Unfortunately, I haven't read of any real clear-cut solutions to this issue, probably due to the fact that it's source isn't always readily definable, and the variance of latency can vary greatly between different types of computer applications. Here are a few things that you should try:
1.) Update your software & drivers at the Line 6 website
2.) Make sure your connection points and cables are good.
3.) Watch your channel volume - excessive channel vol. causes internal "clipping", which you will see being noted on the control window of your PODxt.
Beyond that, it'll end up being a solution by the process of elimination. My other suggestion would be to go to the Line 6 user's forum, and see if there's anything posted there:
http://line6.com/cgi-bin/ultimatebb.cgi
While I do use my PODxt direct-in to my computer, I most often run it into my Zoom MRS-8 digital recorder when I'm tracking stuff. I haven't had any problems at all using that method. From there, I transfer my track(s) via the removable SD card, thru the card reader, and into my computer using Zoom's card reader software. And from there, I can pull it into my propreitary recording / production program i.e. Sony Acid Music Studio.