The availability of inexpensive and powerful graphics cards as well as fast Internet connections make networked virtual environments viable for millions of users and many new applications. It is therefore necessary to cope with the growing heterogeneity that arises from differences in computing power, network speed, and users' preferences. This paper describes an architecture that accommodates the heterogeneity while allowing a manager to define systemwide policies. One of the main objectives of our scheme is to allow slower nodes to participate in the session by preventing fast nodes from flooding slow nodes with too many messages. Policies and users' preferences can be expressed as simple linear equations forming a model that describes the system as a whole as well as its individual components. When solutions to this model are mapped back to the problem domain, viable solutions that accommodate heterogeneity and system policies are obtained. For example, slower nodes may receive less frequent updates than faster ones for one or several information streams. The results of our experiments with a proof-of-concept system are described.