Well, of course there wouldn't be any lag, when a model fades away, all it is, is just a duplicate of the file (After-Image, there's no duplicate for a fading dead character), which basically is already in memory, so the game doesn't have to re-access the file. Now if it's a switch between two models, yes that would cause lag, on the server's side, because it'll constantly have to access both models for switching, then send that data to all the clients. This is why the ESF team has not done the fading in/out of SSJ for the Saiyan characters. I mean yes, the idea is good, but as I said before. It'll cause lag, not a termendous amount, but enough. 56Kers have to deal with enough lag as it is. You have to take into perspective, how long it'll take the load the model, how much packets are going back and forth from server-to-client, and the amount of detail the model has (polygon count, the skin, etc) You all just make a suggestion, without looking at it, at all possible angles. When you all make a suggestion, you all only think about that it'll work on your computer, or a group of computers similar to yours. You have to keep in mind, that not everyone has a high-end computer. Most users, still have, believe it or not, really low-end computers.
Well, that's my on-topic rant for today, I'm done.