MTU of a network

Last thread, i mentioned that one of my friend reduce the MTU size to enable MSN chatting when he is using IzzI to acces the internet. Below is what i get from Wikipedia about MTU:

In computer networking, Maximum Transmission Unit (MTU) refers to the largest packet (size in byte) that a communications protocol is able to pass onwards.

High MTU: Higher bandwith efficiency. However, for high MTU set for a slow interface, can block-up the interface and cause lagging on other packets.

Low MTU: Increase the number of data packet, which increase the routing decisions of a routers. Thus, slow up the communication.

I found that, if i can settle the problem by setting the PPPoE connection to static connection, then i should reduce the MTU. This will actually slow-up the whole network. I experiment his method by setting the MTU==576 at home, and online using a laptop and a desktop at the same time. I found that both of my PCs' connection are slow, and get disconnected quite often.

When i switch it back and using my own method (static PPPoE), the connection is faster and i'm able to play online game smoothly (althought there is a ~1 sec lag).

So to my point of view, to have the home network connect to the Izzi's terminal with a router. It is better to set the router to connect using static PPPoE and maintain the MTU==1400.