Two services have just been announced that host the game rendering and mechanics in the cloud. Basically this means that you install a small client that only sends your input (keyboard, mouse) commands to the game on the server which returns the games video frames in seeming real time. You wont know the difference from playing locally. This sounds to good to be true, we all know about lag online and the technical issue seems to be insurmountable. But there isn't one player on this, there are two large services (OnLive and Gaikai) with proper backing being developed and possibly shortly released.
The OnLive demo from GDC left reviewers in awe but still not convinced. Gaikai only focusing on online games might make it a lot more technically possible (as most lag is from game state calculation any way) but still to be proven.
What do you think?