I've noticed that the action combat mode is sometimes extremely fast (impossible to time the hit), or very slow making it simple to time it. Is this normal, or is it related to the system speed I'm playing on and my connection speed to the system?
The base action combat speed is set by the sysop. If you are running it in a full screen DOS window with no other running processes and using a new character it should be perfectly consitant.
Internet performance and system performance can cause the action combat to be erratic. Player statistics and map level will also slightly alter the speed of action combat.
Also, don't forget that you can toggle it on and off during the fight. Some days are just bad action combat days.