A lag switch is a push button device that helps you gain an edge in many online multiplayer games. It provides a great advantage in online shooters on Xbox Live and PSN like MW3 or BF3.
When the button is held you stop your outbound connection while maintaining your inbound connection. This makes other players see you as frozen, however you can still play and see your opponents actions. When you release the switch any actions you took while it was held (like killing another player) take effect in a burst.