Gizmodo have a hands-on impression of the OnLive service, and although they say it isn't perfect it seems to show quite a bit of promise:
Quote:
OnLive, the system/service that renders current-gen video games in the cloud, is by no means perfect. That said, I'm shocked at how well it actually works...
Once I got started with gameplay, I noticed the slightest bit of lag between controller and screen. Just enough to not feel natural, but hardly enough to really detract from gameplay. Some environments (especially indoor) were more responsive than others to the point that you barely noticed any latency. Definitely not for the competitive gamer, but for the guy who just wants to play for a few hours on the weekend, it's fine.
As far as picture quality goes, there is noticeable compression and artifacting that takes place. When fire and water effects were dominating the screen in Bioshock, you pretty much saw squares everywhere. OnLive doesn't mince words about it, saying it comes with the territory, but they do expect the quality to get better over time as they hammer out the kinks. Some of the indoor textures and environments looked pretty close to running on your own console, with minor dropoffs in sharpness and clarity. The batch of screenshots below doesn't tell the entire story, but it gives a basic idea of what to expect
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http://i.gizmodo.com/5184502/onlive-...on-impressions