Quake2/Paintball2 uses delta compression. That means data is only sent when thing change. If you lose too many packets, the game can't keep up with what's changed and what hasn't.
Say the server sends a packet saying entity X moved from A to B and you get it, then it sends a packet saying X moved from B to C, and it gets lost, then another packet says X moves from C to D, but you don't know where C is, because you never got that packet. The packet you got saying X moved from A to B is too old -- it doesn't have the necessary information.
You can disable delta compression with cl_nodelta 1, but usually that makes the lag worse, because it sends more data. You really shouldn't be playing with bittorrent running anyway. It makes the game laggy for you, and it's annoying for people playing against you, too (your movement is laggy to them as well).
