Now I noticed that lag will occur on the PS3 due to the location of the host, causing me to skip around the map and teleport. I'm not to savvy with these kind of things, but is there any way to fix that issue? Or will it always depend upon who the host is?

Depends on the host... Either that, or depends on how lucky you are... If you are then you might become the host and have no lag whatsoever, instead, you'll be lagging others ;D

so there's no way to fix it?