*Updated: April Fool!*
"We had hoped that the situation would be temporary," Linden Lab's CEO Ebbe Altberg/Ebbe Linden stated in the announcement, "But it is becoming clear that with the growing numbers of people, the Internet is being slowed down almost to the point of Los Angeles at rush hour. So unfortunately, we'll have to reduce graphics quality for the forseable future."
The changes are expected to take hold in a week. For those wishing to take an early peek, the viewer for the downgraded SL is available. Yours truly downloaded it, and took a few pictures. The results were the graphics quality were, severely cut, to put it mildly. Rather blocky like a 1980s eight bit game in three dimensions. But there was no more lag.
To read the statement from Linden Lab, Click Here.