FIGHTERS - At the beginning of WWII the RAF took great pride in their ability to fly in tight formation (as seen above), however, they soon discovered that it made them very vulnerable because each pilot spent more time "holding his position" than looking for enemy fighters. For this reason a looser formation should be adopted.
BOMBERS - On the other hand a close, tight formation in bomber streams gives greater protection to "tail end Charley" or the aircraft flying in the "coffin corners". This page gives the recommended formations and distances from each plane.
LAG - Lag is a computer phenomenon whereby the visual information on the screen is not keeping up with the full information of what is happening in the mission. You might describe it as "computer sensory overload". When this happens other people's aircraft appear to suddenly fall back and/or leap forward. This can really freak a player out and he panics and veers away from the formation.
The secret to handling lag is to realize that it is only a visual anomaly, so the best thing to do is NOTHING. Just hold your speed, altitude and heading and you'll be fine.
Views from the cockpit
View from the right side
View from the left side
View from the slot position
The three views to the right give you an idea of what you should be seeing from your pilots seat.
Pick the plane you're holding position on and note how it fits in the window frame. Do your best to keep it there.
Note how the person in the slot position is a little lower than the flight lead. This is to give you breathing space to avoid collisions.
What happens if, or rather when, you are attacked?
Basically you have two options. First you can continue holding position in the formation and let the AI gunners do their work. Or you can put your aircraft into 'level stab' and man the guns yourself.
But be aware that unless your plane is absolutely perfectly trimmed, it will wander from it's position in the formation, or worse wander into another plane.
So, only stay in the gunner's position for 10 seconds or so. Take your shot and then jump back into the pilots seat to re-establish your formation position.
Remember, your primary job as a bomber pilot, is to stay in formation.