World Of Warcraft: Server Issues Resolving

Blizzard has often said, and I have witnessed firsthand during alpha, beta, the stress test, and now open beta, that their server hardware can comfortably fit 3000-5000 players per server. With 500,000 testers on 40 servers, however, there is more than twice the players than this comfort zone. This is the reason behind the latency issues.

Keep in mind that Blizzard has many more servers available - they are intentionally withholding servers to place stress upon those that are up right now.