I see people complain about being shot while their shooter isn't even aiming at them in unlagged games. However, think of it this way. Given a weapon that fires instantly and whose projectile or effect travels faster than light, would it not stand to reason that you would feel the effect of the weapon before you ever saw or heard it being fired? This is the same reason you see fireworks before you hear them, the light travels faster than the sound. You see the bright flash and know to expect the boom. Well, if you get killed, know to expect that the attacker will turn and fire at you, because from his perspective he already has.
Everything is relative in life; someone traveling close to the speed of light will appear to be zipping around at an inhuman speed to you, while you will appear to be at a standstill to him. Neither of you are wrong, it's all based on your perspective. In the case of unlagged play, neither side is wrong in what they saw happen; the attacker saw the target cross their field of view, turned, fired and killed him. The target saw that they moved somewhere, and through persistence of vision (or in this case, lag due to their ping being too different from the attacker) their brain (the server) filled in that some things happened when they really didn't, because they were already shot and killed.
Does it suck? I never liked unlagged when I started playing, because I played with a relatively low ping all the time. I then saw how things changed when I was no longer using that low ping and had to connect elsewhere. I played some games with unlagged turned on, and realized that while some times it annoyed me, other times it helped me - it leveled the playing field for all.
In my personal opinion, if you don't want unlagged turned on, then don't turn it on. But don't expect anyone who isn't on the same network to have a fun time playing there. If Tremulous didn't have unlagged as an option, I'm sure people would work around it - leading shots, etc. However there might be just as many who wouldn't play, or wouldn't play on as many servers as they do, because it's not fun to have to correct for a variable problem like network latency across the Internet when you're trying to have fun.