eR33t.com Servers are currently running NCServer. NCServer currently has one main feature, and that is wall-hack protection.
NCServer is short for NoCheat Server. The aims of NCServer are to make a server with as much cheat protection possible done on the server-side without the client's involvement. It is generally harder to bypass cheat protection when the server does it.
The server has a check that it does for all players in the world. For each player, it will check all entities to see if they are in the PVS (Potential Visibility Set). If they are, the server sends the entity data to the player, and if not, doesn't send it. What happens though is the PVS isn't perfect. The over-draw can be great which means Quake 2 ends up drawing a lot of players and items behind walls which can't even be seen. Wall-hackers take advantage of this in several ways. One is making walls transparent, another is forcing Quake to render the players in front of the walls, or even simply doing a wire-frame mode ala Asus. NCServer defeats all of these by doing extensive tests on the server to see if the player is truly visible. To the average player, this isn't really noticeable. But what a wallhacker will see is a player disappearing the second he goes behind a wall. Whenever there is an obstruction in the way that 'completely' blocks the view of a player, the server tells the client to not draw the player. However, as you have noted - completely is not always accurate. There are times when a small portion of the model should be visible (small window, etc.) - yet - NCServer detects it out of the PVS.
There are two ways NCServer can not draw clients behind walls. Type 1 is setting the model on the entity to nothing so the quake 2 client won't try and draw it. This will preserve footsteps in the game. However, it is not 100% secure. Type 2 is simpler. The server simply doesn't send the entity data at all. This visually does the same thing as type 1, but footsteps are left out of the game when the player can't be seen. This, however, is 100% secure and unhackable.
Currently, we're using Type 2.
eR33t.com Administration feels strongly on the subject of maximum cheat prevention - such that the rewards of NCServer greatly outweight the flaws.
Hopefully, with a secure server side release of the Digital Paint standalone, we'll be able to do away with such preventive measures.