Onlive interview #1
Onlive interview #2
So the basic premise here is that these people at Onlive have a big server farm that they run high-end PC games on and you, using a web-browser, can connect to a server and play a high-end PC title on any low end machine (no video card required). APPARENTLY they've developed some bespoke system for eliminating the lag that occurs when your controller is controlling something several miles away instead of right in front of you and the way it sends frames back to your pc is also optimised in some fashion to eliminate lag.
Personally I'll believe it when I see it. I could imagine maybe a strategy game could work as it's not so time-sensitive as, say, a shooter but really there are so many things that could go wrong with this it seems unbelievable to me that it would work properly.