How to change between guitar types in Rocksmith

The delay is caused by two different factors. First, the television takes time to process the digital signal. Second, the game takes time to recognize the sound being played. The latter delay is unavoidable, but the former can be reduced by adjusting your television settings. Additionally, if the game knows exactly how bad the delay is, it can take that into account when determining whether or not you hit a note.

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Here are some simple steps to get you on your way:

• Use the in-game Display Lag Correction to help your note highway come down faster or slower. The default is set to 50ms is most cases!
• Make sure your console is set up to match your TV’s native resolution, whether it’s 480i to 1080p. In kind, make sure your TV is set up to match your console’s native resolution.
• If your TV has a “PC” or a “Game” setting, try activating that. Often, these settings may auto-correct some unwanted lag across all your games, and not just Rocksmith.
• If there are no PC/Game settings on your TV, access your TV’s options menu and fiddle with the settings here. Most prominently, image scaling and processing effects are going to be likely culprits. Deactivate them and you’ll probably see improvement.

In my experience Rocksmith does benefit from a humbucker. This is simply due to the reason mentioned in joshbuhler's answer - the more volume, the better. Since the average humbucker has a higher output than the average single coil, it works a bit better. Another thing I've noticed is that Rocksmith works better with a brighter pickup. For instance, on an LP-type guitar the bridge pickup seems to work better. When using the neck pickup, Rocksmith tends to have problems with detecting notes on the higher strings, especially when playing chords, even with the volume and tone knobs cranked.

So my order of preference for pickups to use with Rocksmith, all other things being equal, would be:

1. Bridge humbucker
2. Bridge single coil
3. Neck single coil
4. Neck humbucker

Everything depends on the actual guitar and pickups, though. Neck humbucker on a bright-sounding guitar might be better than the bridge humbucker on a Les Paul, and high-output single coils (like P90s) might be better than any humbucker. I'm currently playing Rocksmith with a telecaster that has a 10k single coil in the bridge, and it works like a charm. Even better if I switch the neck pickup in series with it.

In the end, you just have to experiment with your guitar(s) and pickups and see which combo works best for you.

One thing to try if you just cannot get Rocksmith to detect notes properly with your guitar, would be to put a booster or compressor pedal between the guitar and the Real Tone cable. I know the game warns you not to do that, but I don't see the harm in putting something there that can help bring the levels up a bit. At least theoretically. I might try it out later and see what happens.