Previously only available for CRM Online, the CRM Diagnostics tool is now released with CRM 2011 Update Rollup 4 for On Premise installations.
You can access the tool using the following URL after you install UR4 or later.
The latency and bandwidth test the download speed across the wire from the CRM web site to the client browser. A low latency and high bandwidth is ideal. If your values show a high latency and low bandwidth then your CRM experience may be slow depending on the extremity of the range. For some performance reading you can take a look here.
Optimizing and Maintaining Client Performance for Microsoft Dynamics CRM 2011 and CRM Online
Optimizing Performance for CRM Online 2011
http://community.dynamics.com/product/crm/crmnontechnical/b/crmonlineteam/archive/2011/04/08/optimizing-performance-for-crm-online-2011.aspx – even though this is for Online there are some important points
Microsoft Dynamics CRM 2011 Performance and Scalability with Intel
Improving Microsoft Dynamics CRM Performance and Securing Data with Microsoft SQL Server 2008
Optimizing and Maintaining the Performance of a Microsoft Dynamics CRM 2011 Server Infrastructure
The above documents should give you a solid understanding of performance related improvements you can apply to your Dynamics CRM deployment.