EPIC does overshoot, that's true -- any forward extrapolator will do that. What it does do, is make everything move with C0 continuity -- there is no "Jumping" or "Snapping" in position. The two positions it keeps are:
- last displayed position
- next target position
Next target position is calculated as a forward-extrapolated position from the last received network position.

Note that EPIC interpolates arbitrary float vectors; you can create interpolators for linear and angular velocity as well as orientation and position if you want, and use that to drive the actual display.

Quote:I'd be amazed if there exists a system that could get smooth motion out of 2 updates per second

Actually, there is: just display everything delayed by half a second, and use splines to display. However, you do pay with input lag. Latency doesn't have a single perfect solution -- you have to take the various tools at hand, and craft a solution that best masks the latency for your specific application.