Advanced Lagometer consists of two lines - bottom and top. The bottom line advances one pixel per each snapshot received from server (by default they are being sent at 20 snapshots per second rate), while the top one advances one pixel per each frame that is rendered by client. Thus, if the machine framerate was 20 per second, both lines - top and bottom - would run at the same speed.
Bottom bars correspond to delay before sending a snapshot by a server and receiving it by a client (so called "ping"). The shorter the bar, the smaller the ping was. Red bars mean that the frame has not arrived on time, yellow ones - that the snapshot was suppressed to stay under the rate limit. Top bars can be drawn in blue or in yellow. While server shapshots are usually received at lower rate as the client framerate, the software interpolates position and movements until it gets an update from a server, when it adjusts own state accordingly. The height of upper bars is proportional to the interpolated time between snapshots received (so as long as they come regularly, it stays below the "zero line" and is drawn in blue), or - if snapshots stop to arrive on time - is extrapolated after the last snapshot expected (then bars crosse the "zero line" and are drawn in yellow). If those bars stay yellow for too long, client is forced to interpolate its frames beyond the "reasonable level" and finally, when the snapshot arrives, the prediction turns out to hardly correspond to the server-side version, which results in a jerky, uncontinuous movement of scenery (obviously lowering the quality of gameplay).Source: http://en.wikipedia.org/wiki/Lagometer
Lagometer won't help you to decrease lag, it only tells you when you have lag. 130-140 ping is fine, I have 180-210 ping and I can play very well. Do you have the 2.60b version? I recommend it to you. Also here are to links you should look at.How to recognize your lagPB Settings - Reduce Lag