on the purple extrapolation line... if there are red dots underneath the purple line, what does that signify?

That you are real gay

http://www.ensl.org/articles/423

Basically your inputs are happening faster than you can physically send information to the server (maximum 102 Hz).

This means there's interpolation between your inputs (at 204 fps, the average of inputs every 2 fps is sent to the server). Basically, your inputs are smoothed - there is loss of information.

Not the end of the world. That's what mildly drunken me takes from that anyway.