LBX is useless, of course, if you're only running applications locally, or if you're not running X at all.
Also, if you're running on a fast LAN, LBX won't be much help. Some people say "if LBX cuts down on network traffic, wouldn't it be good to use even on fast LANs?" It might be, if your goal is to reduce network traffic. But if your goal is to get better response time LBX probably isn't what you want. Although it does introduce caching and compression, that comes at a cost on both ends (extra memory for caching, and extra CPU for decompression). If your link is fairly speedy LBX will probably result in an overall slowdown.