Basically what we did here was compare the current hitboxes (g_hitboxes 0) against the so-called improved hitboxes (g_hitboxes 31).
The results are pretty clear.
STANDING
g_hitboxes 0





g_hitboxes 31


Clearly, you can see with our hitboxes the way they have been, a shot at the head that missed would still score a body shot. With improved boxes the body hitbox is lowered to the shoulders. This makes it harder to get headshots.
You can see that hitbox in action here:

I am shooting at shell (you can see my crosshair) plainly outside the frame of his body, yet I was scoring hits.
CROUCH
g_hitboxes 0


g_hitboxes 31




Again, the body hitbox is lowered to the shoulders. We were all lagging pretty hard when we did this, so you can see the trail when the player is moving in the last shot (more on that later)
PRONE
g_hitboxes 0




g_hitboxes 31



This is the most appauling of all. The size of that body box with 0 is huge. Clearly an improvement with 31.
DEAD
g_hitboxes 0

g_hitboxes 31

Again, huge boxes for 0.
PLAYDEAD
g_hitboxes 0

g_hitboxes 31

LAGGING-MOTION
This was an interesting experiment in seeing the server from the eyes of a lagger. With all the extra processing and debugging, we all lagged at around 500 or higher ping. You can see this plainly in the trails left behind players as they moved in the following shots:


me moving backwards

Crazy jumping

ANOMALIES
Some strange stuff happened as well, as you can see:

He is not jumping, he's standing on the axis medic here.


Nort for some reason still had the old hitboxes - lol.
In this shot, you can see how a player who is "hiding" around a corner is exposed to shots:

So, what did we decide.
Everyone there agreed that hitboxes 0 was a joke. So we turned on hitboxes 31 on the server. What does this mean? Expect your accuracy to drop. Now a lot of people are complaining that the boxes already suck for some reason.
THis could be to antilag and antiwarp. Both settings that Nort and Shell tested out, I'll let Nort explain that one, but I believe he did see a difference with antilag turned off. That remains to be seen.
As far as accuracy, it only seems reasonable to me and many others that if you are shooting at the head and you miss, you SHOULD miss and not get a body-shot as a consolation prize. That is going to be the biggest thing you'll notice with the new boxes.
I played for about 3 hours with a pretty full server, and I admit my accuracy did go down. IMO, that is ok, it just takes an adjustment. We'll see how it plays out.
Oh, if you want to sit through some really long and dull demos:
http://www.iowclan.net/iow/images/hittest/hit-test-demos.zip
props to:
shell
nortie
plan9
wolvie
quazi
crazy_rpg
venom
scraebbes
...for helping with the testing.
anyone else?