this is probably old news, but here you go;
http://aws.amazon.com/ec2/
you pay for memory usage, processor usage, and time usage.

sounds sort of like renting an extranet thin client or a more comprehensive remote desktop.
Might be a cost effective way to run a webserver though. Oh no, the per hour cost racks up to over a grand and thats before data transfer costs

Cloud computing is a very old concept, along with grid computing. Lots of websites you use (especially those Web 2.0 startups) use it (just look out for EC2/AWS at the status bar when the page is loading), because it's rather cheap. My own site uses Media Temple, a rather cheap hosting company in the Valley (I think). I use the Grid (gs) plan, since it's scalable and fits my need.

Well, you can make and analogy about cloud computing being the dumb terminal -> mainframe of the modern age but I still think that a purely online OS* is not so useful as well as hard to implement/design.
Cloud computing offers scalability and is efficient especially for web apps, which require more resources than normal websites (would you host your Wordpress blog or simple HTML website on such a service?) and tend to fluctuate in resource need. As it's been said before, this solution is not new but has gained more popularity in the 'recent' advent of Web 2.0 and webapps.
Another issue with storing data in the cloud is privacy: now I can unplug my PC and be sure that my data can not be accessed by anyone else except me (assuming that I can restrict physical access to the machine), when switching my data to online I can never be sure 100% that no one else has unauthorized access to it. But that's just the paranoid approach, I have lots of data in the cloud.
*by a purely online OS I mean no local storage and offline capabilities of any kind like those introduced by Google Gears, Adobe AIR, Microsoft Silverlight etc.

Oh yes, surely.
[url=http://www.channelregister.co.uk/2009/01/20/microsoft_redmond _construction_plans_leases/]http://www.channelregister.co.uk/2009/01/20/microsoft_redmond_construction_plans_leases/[/url]

Link's broken...

I was going to be a smart ass and copy/paste the full link string (not the URL) and then shorten it. After I did this and checked the short link I saw that, indeed, the link is broken.
My plan is foiled.

the working link
[url=]http://www.channelregister.co.uk/2009/01/20/microsoft_redmond_construction_plans_leases/[/url]
(I hope)
*edit, tested and worked.

To hell with that. I'll keep Vista if it comes to this.
Besides, this has existed for a while, and you think people are going to actually pay for usage of their own damn hardware? This will fade out much like DivX players did.

I imagine that they'll probably just sell you really cheap hardware and then do all of those things that's necessary on another computer elsewhere...
that's definitely where the business world is going to go, it's so much easier to spy on your employees that way.

The job I'm planning to get (cameraman for movies, TV shows, or any other place that needs them) keeps me clear of the cubicle workspaces that would apply this Big Brother-like standard. Besides, there will be ways around. There always are.

there's plenty of good old fashioned client-server 'spy on employees' applications that are perfectly adequate to make sure they're not playing wow or downloading porn

Like stealthed keyloggers that cannot be seen when bringing up the Task Manager. Other companies simply block the hell out of the browser to whee it only goes to specific sites and that's it.

exactly, give me extensive blacklists or well researched whitelists and a bit of fucking work from the IT department. Keep the responsibility for data security at home, allows for as many different modifications of the system as needed and still have scope for the invasion of employee privacy! Thats how my IT section is going to work damnit, I just need someone to actually employ me now