Recent work by the authors and colleagues developed an Internet-distributed hardware-in-the-loop simulation (HILS) platform to integrate two geographically-dispersed HILS setups over the Internet, namely, the engine-in-the-loop simulation setup at the University of Michigan (UM) in Ann Arbor, MI, and the driver-in-the-loop ride motion simulator at the US Army Tank-Automotive Research, Development and Engineering Center (TARDEC) in Warren, MI. As the literature discusses in detail, distributing the HILS over the Internet introduces transparency issues due to the delay, jitter, and loss associated with the Internet. This paper first illustrates on a simple example that distributing the simulation can in and of itself be another important source of transparency degradation. Then, the paper presents a variation analysis to evaluate the effect of these two main sources of transparency degradation on the performance of the abovementioned setup. The paper concludes that transparency and how it is affected by distributing the simulation and by the delay, jitter, and loss associated with the Internet is dependent on the signal of interest. Specifically, it is shown that distributing the simulation has more effect on the transparency of the engine torque and throttle signals than the delay, jitter, and loss of the Internet between Ann Arbor and Warren, whereas it does not significantly affect the transparency of vehicle speed unless the Internet delay increases significantly.