I am really trying to get set up to have puredata as a DSP effect unit. I ran some tests using this:
guitar---> boss gt-10 input
gt-10's usb digital in/out---->computer,

and then within PD, I had a simple chain going:

[ADC]--->
[clip~]--->
[cos~]--->
[DAC] .....( i think those are the right names for the cells, just basic waveshaping)

the [cos~] block on its own sounds incredible on guitar. I really want to have it except there was about 200ms latency which made it impossible to really use... I even downgraded the sample rate to 11025 and I couldn't close enough to make it usable. Is it just not possible to do USB signal processing without latency?

Latency is the keyword you should search for. Or even better: pure data low latency.

My best results were with Ubuntu studio, where I got it down to about 20ms, but there are people fine tuning Linux systems to get 5ms and lower.
If you're on a Mac, then JACK can help get the latency down to around 20ms for light processes.

But yeah, latency is a pain, and all computer based audio suffers from it to some degree (and even dedicated digital hardware will have a bit..)

200ms is huge latency I guess you're using windows. Some tips that worked with me:

1. use an audio interface (usb or pci) rather than your cheap built-in soundcard

2. increase the sample rate to lower latency do not lower it ! (but it'll cost you more cpu usage)

3. Linux gives better results for audio but if for some reason you are stuck on windows you'll find here some links to configure your OS accordingly : http://coloscope.wordpress.com/2012/11/22/optimiser-windows-pour-la-musique/ the article is in french but all the links are written in english.

It all depends on a combination of factors: audiointerface (you're trying to process guitar, so assume you're using one), drivers, OS and .... luck! I've finally managed to get my Presonus Firebox to achieve 10ms on Windows7 (64bit) with the provided ASIO drivers. Never could get this low on my old laptop (too many cycles to be handled by the old cpu i guess). But now my MOTU asio drivers aren't usable anymore, which were on my old pc. The problem is that most of us can't easily switch interfaces and OS of course... And unfortunately the devs just don't seem to care about a better asio implementation for windows.

good tips everyone! Im running windows 64bit but Ive been thinking of making the switch to linux. Hopefully I will have some luck upsampling, I did not know I was adding latency by downsampling.

And about soundcards, the boss GT-10 floor effect is in the place of where I would be using one. It sends and receives signal over a USB cable. I was under the impression this is about all the hardware I need to at least process guitar through PD but if there is any interface you can think of that is known to be good for DSP would like to research it

Thanks again so far, I post what ended up working if I get a decent latency.

Meanwhile you should also check ASIO4ALL (www.asio4all.com). It's a free ASIO Driver wich will probably recognize your cheap sound card.