To tell the truth I'm waiting to see what the onlive console will do......if that is even half as cool as the demos they've shown on it, there won't be a reason to own a 360 or PS3. And I love my 360.
I'm a systems engineer currently running a rather large Citrix farm. The tech isn't that different in OnLive than what I am doing, but keep in mind that OnLive is nothing more than a startup company right now. Additionally, they are only playing PC games. Any console games you see running on OnLive are console games there were ported to the PC.
Regardless cloud gaming is going to be a very viable option in the coming generations. Likely OnLive will be snatched up by Microsoft and they'll absorb their transfer protocols. OnLive is already using and licensing terminal services through Microsoft for their technology so regardless if MS buys them or not, they're paying MS $$ just to operate.