Living closer to the physical location of your realm server will often reduce latency. However if you're a US player on a US server you shouldn't be over more than about 400ms at most or something is wrong. I can play on a Boston datacenter realm (no, they aren't all in Irvine, CA) from central WA and only get about 250ms on average. Generally, the closer you live the better, but the network topology could be such that your data gets routed half way across the country and back to go to a server that is just across town.

To find out where your realm is physically located and what ones are closest to you, check this out: http://www.wowwiki.com/US_Realm_List_By_Datacenter. You can test your latency to any of the realms by pinging them from the command line. Just go to Start->Run and type in 'cmd' then at the prompt type in 'ping 123.23.52.15' (replacing the number with the IP of the server you want to check). Obviously it's not cheap to transfer a full multibox team, but it could be a consideration prior to choosing a realm.