That's encouraging. Are you:
Passing entities (MBV) over the wire?
Yes.
Using IIS to host middle tier?
Yes and no. I guess my midle tier exists on both client and server - i do stuff where it is appropriate.
Caching data at the client?
Some data that rarely changes (list of countries for example), yes. However, I have plan to cache a lot more. On client, of course.
Seeing happy users???
Until now: no. The original design was to run over (A)DSL so the communication speed issue wasn't top priority. It turned out that it has to run over modems, too. So the issue soon become top priority. That made me switch from .net remoting to RemObjects SDK (compression + real time data flow feeedback). I am not finished with modifications yet, however, aggressive client caching and compressed channel should do the trick. It is as fast as it gets. Even now it works reasonably fast for the most part (without those improvements).
So, I really believe that once all these features are in place the application will run good enough even over modems. I guess I'll discover in a week or so.