I would imagine the catch would be anyone that is stuck with a download limit of any kind. A lot of gaming at HD streaming rates is going to eat into that allowance. Not to mention if you have a dodgy connection like mobile internet or satellite then regardless of your speed you could be in for a glitch-fest.

Just imagine you're playing a ubisoft game that forces you back to the last checkpoint at the first sign of a dropped packet

I think the catch is you still need to pay for the games and then after a "free" year you need to start paying a subscription fee or you lose access to all those games you "bought". Then the more games you buy the more you lose if you ever quit, these guys are marketing masterminds.

Bingo.
The OnLive Game Service (the “Service”) Fee will be waived for the first 12 months from the date you activate your OnLive Account. During these 12 months, your access to the Service will include free demos and community features, such as member Profiles, Friending, Chat, Spectating and Brag Clip™ videos, but will not include any games, content or other services that are offered for purchase, and which must be purchased separately.

I still think you're paying a shitload of money which, over time, would be enough to build a decent gaming rig.

I already got my "Founder's Club" e-mail a week or so back (with coupon for "free" game), just waiting for the service to actually go live and try it out. I fully expect (and kind of hope) that it will be an unmitigated failure, but we'll see.

So its like a p2p mmorpg with games beign like microtransactions?

Kind of. It is a game streaming service, kind of like a video streaming service. It has a subscription fee, which gives you access to the service and things like game demos, gameplay videos and possibly other useless stuff, but in order to play a full game, you have to buy it (at what price, I don't know). Of course, if you cancel your subscription, you lose any games you may have bought. It is truly the ultimate form of DRM, and that is not a good thing.

Its also MAGIC! At least going by their marketing schpiel

I was going nuts hearing that Magic word both from Microsoft and Ubisoft about their poxy products. Everyone just has to jump on the Apple bandwagon.

Any technology not sufficiently understood is indistinguishable from magic?

For a person who likes seeing his computer infront of him, restarts or troubleshoots the CPU when there's a problem, wants total control and hates DRM, Onlive is the ultimate nightmare and utter bullshit.

Does anyone know how much games will cost?
I can't imagine you'd have to pay full price for games, plus a membership fee. Would you?

I understand networking enough to know that their (since buried) claim of 1ms is not only a lie but an utterly impossible one