I’ve had OnLive now for several days and have played about a half dozen games (only demos so far) and have been pretty impressed. It allows you to play with the keyboard and mouse or a 360 controller, so it should accommodate all tastes and both work well. So far there hasn’t been any lag, and although there was a warning pop-up in the corner once noting there may be a connection issue, it stayed in-game and playing smoothly. There was also once a latency error which blocked login, but just trying again made it go.
Over the coming months we should see the game library grow, hopefully it will be at a point soon where a long list won’t be good enough. As long as Microsoft and Sony don’t crush these guy, the days of console and PC gaming as we know it may be numbered.