Latency will increase to values above 1000 sometimes if the CPU is working really hard.
If an addon is loading a lot of data, or several addons try to check each slot icon in your inventory (several times) the ping will increase somewhat.
Same for me after a zone change. It takes about 3-5 seconds until the latency value is below 100 again, but I don't really notice that it is that high. It seems to be just a "visual latency".
I have noticed that since 1.6.x my LOWEST latency have increased from ~150 to 200+.
The last few days I have had issues where I even got disconnected with latency at 999+.
This even happens when I am not moving at all, just standing in town.
I also noticed a LOT of people on both servers are having latency issues since update 6 was released (see official forums).
I live in Switzerland, the EU server is in Germany and I normally have a latency between 60 and 100.
I didn't noticed any change after 1.6. The only peaks I noticed are rare, area wide serverlags which include NPCs.