3.2 Lag explanation
CRTs show their input just like it is sent. They receive the color information for one pixel and immediately display it. Because they have no native resolution, no scaling is necessary.
Flatscreens on the other hand have a set resolution. If the incoming resolution does not match it, it needs to be scaled before it can be displayed, or else you would have black borders around the 640x480 gameplay window.
Also, like I wrote earlier, all analog video outputs are interlaced. Interlacing technology looks good on CRTs, but it looks very bad on flatscreens. Thus, most TVs will do some deinterlacing which further increases the input lag.
Sometimes players report they have found lagless LCDs. Keep in mind that there are big differences between players in the amount of lag they can perceive.
The lowest latency a LCD can have—assuming no image conversion takes place, which is never the case for Melee—is 5 ms. That’s 7000, in words seven thousand, times as much as a CRT (approx. 670 nanoseconds). It is impossible to find LCDs with “no lag” because they simply cannot exist.