PoSSeSSeDCoW: Well, duh. Their product literally would not work without an Internet connection. I don't think that's really a valid complaint about the system.
emusan: My main complaint about them is the horrid resoultion and graphics settings they force you to run your games at, especially with a widescreen monitor...
(And other Onlive quotes)
Yeah, it probably depends on your gaming situation, regarding whether you'd go with them or not. I wouldn't, but there are sure some interesting benefits like being able to play a game on lower-end machines (like say a laptop/netbook) which normally can't support some of the games. Or playing it on a non-primary computer in general where you don't have to download/install the game. And who knows about its future, maybe they'll find a way to get console-only games or something onto the PC platform through their system. And the guest viewing system is kind of cool and Xfire-ish, though a bit rough around the edges in general.
But yeah I probably wouldn't buy mainstream games from there either, at regular prices, when I can get the full game from elsewhere. I won't consider an X-day playpass either but I would consider a full one if it were significantly discounted and somehow unavailable for cheap elsewhere. But since I'm too lazy to unsubscribe from their newsletter, I thought I'd dump their "deals" down as a pricing comparison. :)