Maximum Transmission Unit (MTU) refers to the size (in bytes) of the largest packet that a given layer of a communications protocol can pass onwards. MTU parameters usually appear in association with a communications interface (NIC, serial port, etc.). The mtu may be required by standards (as is the case with Ethernet) or decided at connect time (as is usually the case with point-point serial links.
The smallest MTU between two hosts is known as the path MTU.
High MTU brings higher bandwidth efficiency. However large packets can block up a slow interface for some time, increasing the lag on other packets.
For example a 1500 byte packet, the largest allowed on an Ethernet, will block up a 14.4k modem for about one second.
Common MTU Values
Value - Link type
65535 - PPP max, Hyperchannel
17914 -16 Mbps Token Ring
4464 - 4 Mbps Token Ring
1500 - Ethernet, PPP default
1492 - IEEE 802.3/802.2
1480 - PPPoE
1460 - L2TP
1454 - Optimal PPPoE-over-DSL MTU (see http://www.mynetwatchman.com/kb/adsl/pppoemtu.htm for details)
1372 - PPTP (PPP/GRE/IP) default, Windows XP
576 - X.25, default for many SLIP implementations