Here is a post with information on lag:
http://www.reddit.com/r/smashbros/wiki/lag
Basically, the things that will cause lag are:
• Analogue to digital conversion. The Wii outputs in an analogue format while your LCD/Plasma/LED TV outputs in a digital format; the process of converting from the analogue to the digital format takes time.
• Picture upscaling. The Wii outputs at 480p or 480i while the TV outputs at a higher resolution; the picture needs to be made bigger to fit the TV which takes processing time.
• Post-processing effects, which take time to apply.
• Deinterlacing, which takes time to perform.
You want to eliminate as much of this as possible.
Non-CRT TVs will always have some lag (CRTs technically have lag too but it's an extremely small and completely insignificant amount; they still have the least lag for a Wii of all possible output devices). This lag can be reduced but not eliminated. You will be able to reduce the lag on your current TV but not to insignificant amounts. The only way you can reduce the lag to negligible amounts or below is to use a CRT or a suitable monitor and analogue to digital converter combination.
Using component cables instead of AV cables will significantly improve (but by no means eliminate) the lag. This is because it will allow you to output in progressive scan, which means that the deinterlacing process does not have to be carried out (AV cables are only capable of carrying an interlaced video). Third party cables are readily available and extremely cheap, while being equally as functional as the much more expensive official cables. Component cables will also increase the picture clarity (the effect is more noticeable on large TVs). Note that these cables won't help for the PAL version of Melee unless you hack your console and force a progressive scan output, as it cannot output in progressive scan natively.
Until you can get a CRT or an appropriate monitor/converter
Disable all unnecessary post-processing on your TV (I'm not entirely sure which functions in particular will actually affect the lag, but I'd recommend you just turn off everything that you don't need and and know the purpose of), as the processing time required for these features delays the output of the image. If the TV has a "game mode" then turn that on, and if it has a "cinema mode" (or similar) then turn that off.
If you have a different non-CRT TV, try that with the same setup and see if the lag is any better (it differs significantly between TVs). If you have an appropriate converter, most LCD monitors are better than most non-CRT TVs. If you have a working CRT monitor with the correct resolution and the necessary cables to connect the Wii to it, then it will be just as good as a CRT TV (unless the method you use to connect it introduces lag).
Focus on practicing tech that won't be affected by the lag, like wavedashing and shield dropping (basically, anything that is entirely muscle memory and independent of what is displayed on screen). I would recommend that you don't practice things with extremely precise timings that require response to a visual (such as reflecting projectiles with a power shield or Samus's super wavedash) at all, since it will be far too difficult to adjust when you do play on a CRT.
Unfortunately many things which are affected by lag are necessary to learn (and will be learned automatically as you play anyway) and their timing differences cannot be adjusted to easily or quickly (some are easier than others in this respect). You'll have to just deal with the lag for these and just adjust the timings when you get a CRT of your own. Until then, when you play on a CRT, just try as much as you can to consciously do things like airdodging onto platforms later, jumping after throwing the opponent later, fast falling later when hitting the opponent with a SHFFLed aerial, and so on.
CRT TVs should be available for much cheaper than $100; there are many cheap or free ones. Of course, you need to find some that are sufficiently close to you and you need the means to transport them (almost no shops that you can get one from will ship, while people on Craigslist or any other equivalent website will occasionally but rarely offer to deliver within a small distance of their location). Ask friends and family and check charity shops.
This thread is relevant:
http://smashboards.com/threads/work...ups-tv-monitor-console-capture-device.355292/
