Saw this article by Digital Foundry today on OnLive.
 
It's lengthy and reports with scientific accuracy on stuff like input latency (150ms or more), and compression quality.
 
"However, despite the incredible achievement in streaming gameplay with relatively low latency, the bottom line is that the gameplay experience is not better than what we already have - by and large it's tangibly worse. The varying quality of the graphics is questionable, and the lag is best described as "better than expected" - nowhere near the claims that have been made for the system, and still measurably inferior to current standards. It's just a question of how your personal perception level will interpret it as to whether it's a game-breaker or not.

In terms of buying games, the prices for new titles are too high and the selection of games is uninspiring. The notion of paying so much for what is measurably an inferior product compared to the physical disc means that OnLive simply cannot be taken seriously at this point in time - especially when you don't own the games you are buying. This is something the industry en masse needs to get its head around as digital delivery becomes more important: if you're going to take away basic ownership rights, and offer a lower-quality version of the game to boot, the price needs to diminish accordingly."
 
"Of course, in terms of overall value for money, OnLive says you don't require any specific gaming hardware and you'll never need to upgrade, so this in itself sounds like you're making a massive saving, but the fact is that the PC required to run the system isn't insignificant. Unless you're running on a laptop, upgrading it with a relatively inexpensive graphics card will offer an overall gameplay experience that effortlessly beats OnLive on quality and response. Perhaps by the time expensive next-generation hardware is unleashed upon us OnLive's value proposition will increase accordingly, but until then the value just isn't there."
 
One note, the article isn't just for comparing OnLive to PC, they also make OnLive to console comparisons here and there.  Bottom line, OnLive comes out on the bottom.

Onlive is not where you want to go for quality right now, but I think that it has lots of room to improve and lots of time to find its target audience. Bad graphics and performance are not necessarily things that will put mainstream people off. In addition I think that their hardware and infrastructure may greatly improve in the future, look at Steam when it was first released and look at it now. I think its main roadblock at the moment (and the same with services like Steam) is bandwidth speed and allowance limitations, which are abysmally low for the vast majority of the population right now. 

From the article, one of the frames looked like this:  
 

 

Once the entire country is wired with a vast, vast majority of fiber optic cable, then maybe, maybe OnLive will be a viable option for playing games. As it is, even the fastest internet connection is going to experience some latency, and the day I lag in a single player game is the day I flip out and start breaking shit.