It is mostly seen in MMOs - a large number of players means there are more cases of rubber banding either the server is overloaded, or players have high ping. This often occurs in FPS or similar games that have a large number of people per multiplayer server. Rubberbanding is a term used to describe a player's random or jerky movement in a multiplayer game when they're experiencing high latency.
This is extremely annoying, especially with GunZ 2: The Second Duel and online games with optimized-paced ‘twitch’ mechanics. Rubberbanding is one of the major problems most gamers encounter when playing online games.