I've done a bit of research on this topic, and it's just like bongcloudftw says at comment #20. Live ratings are deflated, while online ratings are inflated.
It's quite typical for a player to have an online rating about 200-300 points higher than her live rating, and even greater margins are not surprising - although I think that even in this case, a difference of 500-600 points may indicate someone who uses the assistance of engines.
(Or even more than likely, chatting with all of you folks why i can't reply rightaway...heh...go figger)
8)