Never send messages from Update like that. If you have 60 FPS you are sending 60 messages per second. If you have 1000 FPS you are sending 1000 messages. This is absurd, and will clog your network, forcing your packets to go out in batches instead.
Sync must be done infrequently -- when values change -- and no more than a few times per second.
As devomage pointed out, and as I've explained many times on this forum, there is no way to eliminate jitter in networking, but there is a way to hide it. The best way of hiding it is to separate renderer from the rigidbody (thus the lag script). I used it in the 2nd example that comes with TNet -- the one with the falling cubes.
Multi-purpose game kit uses TNet to sync unit movement and it the position sync is done every few seconds. In between I sync the movement vectors resulting from input, leading to clients doing their own local playback of what would happen to the unit if certain buttons are in a certain state. This leads to smooth results, with minor corrections occurring infrequently.
I did the same thing in Windward. I sync player ship position once every 4 seconds. I sync actual movement axes ~4 times per second when they're changing, and not at all when they don't.
Many people approach networking with some silly notion that "more = smoother", when in fact nothing can be farther from the truth.