10ms latency is how long sound takes to travel 3-and-a-bit metres. So if your amp is a few metres from you, you would experience that delay between hitting the guitar strings and hearing the amplified sound. This should barely be noticeable. If you were noticing a delay greater than that in your Ableton effects setup, your settings needed tweaked. All of this is completely possible - I had a PC-based electronic drum setup in 2006, running through the Reason DAW, which had 8ms latency between hitting a pad and hearing the result.
Hmm, I wonder if Cython (static Python-to-C compiler) would make writing audio code easier/more possible?