Yikes. That's not gonna happen round where I live for years.

I'm probably going to sign up at release just to test it. I am curious and I think that OnLive could be a great service for people looking to rent short singleplayer titles. Some of us do not play games more than once, so putting down $50 for a 10 hour campaign seems silly.
It is also very promising for PC gamers who can't afford to upgrade their hardware on a regular basis, or more casual gamers who are uncomfortable with self-built systems.

On top of the technical issues that I think will send this service the way of the Titanic, I'm just not really seeing a good target demographic for this kind of thing. Serious PC gamers are already more than willing to drop money on hardware, and also tend to like the freedom of having control over their systems. Most folks who aren't too keen on dropping money on hardware and want their games to just work are already on consoles. The high bandwidth requirements also aren't particularly cheap in the US, so PC gamers on a budget probably won't be keen on forking over significant money each month for the 10+ Mbit connection on top of the fee OnLive charges, and that's not even touching the vast swaths of people who don't even have high bandwidth, low latency connections available to them, or folks with bandwidth caps for that matter. I'm just not really seeing the market segment that OnLive is trying to target with their service.

Anyone with money who likes games. Don't think they've thought it through in as much detail as you have
Well their entire business claims are built upon what can only be double talk or outright lies, no reason for them not to go higher. Half of the stuff they claim, most notably a round trip ping time of 1ms can only happen if they've managed to break the speed of light, it takes 3 times as long as their claim to ping a workstation in my local network, add layer 3 processing overhead, upstream transmission and... oh yeah, all those other fucking routers along the way
I have a feeling that if that'd happened they'd be collecting prizes for physics and redefining communications as we know it rather than making a game rental service.
Still, this is a good technology (or at least good lies about technology) to use for one of my emerging tech uni assignments

You know, I first thought this "bridging the gap thing between Macs and PCs" that OnLive was doing was huge. Then Steam said it was doing it, and since Steam doesn't charge a subscription to play the games you bought, that throws OnLive right out the window.

This has nothing to do with Mac vs. PC. It is an entirely new way to consume games.

WTF? So you pay for the monthly fee, THEN on top of that you're paying for games? Where does the madness end?

Well, there is also a fee to cancel your subscription. Oh, and a pre-fee, which is required before paying any fees.

Powerplay Version 2. John Carmack's quote still applies:
"I had a long talk with a couple people from Valve about the PowerPlay initiative, but they couldn't give me enough specific technical details for me to endorse it. I'm all for improvements in networking infrastructure, but at this point, there isn't anything actually there, just an intention to improve gaming. They need to tell me SPECIFICALLY what I am supposed to be endorsing. At some point, bits have to go into packets and routers need to make decisions on them. Changes at that level is what I want to hear about, not strategic company relationships."

Don't forget the continuous fee that's supposed to cover their costs of handling your payments.

And the shipping and handling of all those data packets

LAG FREE physical mail, users just have to put themselves in stasis after processing each packet

Hey now, don't underestimate the bandwidth of an envelope full of USB sticks. Now latency is a bit of a different matter...

The funny thing is: whenever you make a connection to the net, it will borrow from OnLive which will result in sudden freezes. The huge problem, compared to Youtube, is that this service cannot buffer because the content is being created on the fly. The result will be that any small interference will see the image freezing BUT the game itself, on the servers locally, won't! I predict massive problems.