There seem to be quite a few people who don't know anything about OnLive, and are just dismissing them out of hand.
This is not a fly-by-night operation. This is a serious attempt to become the de facto cloud computing gaming system.
Considering the amount that people spend on their Xbox Gold membership, I don't see why they shouldn't make serious inroads into the console gaming market. Spending a little a month is no big deal, look at WOW.
No, it won't be coming to the UK anytime soon, but they don't need us. They have the rest of the world to make money from.
And anyway, I'm a PC gamer, so I won't be touching it with a bargepole, but I'm sure there will be plenty of console gamers that will.

Again you're, sorry to say, naively dismissing this because of your stance towards broadband penetration in the UK. Dismissing technology because of your country's terrible choice of politicians and companies in this regards (just at the danish public chooses incompetent science ministers) when you should be dismissing the possibilities for this to be optimized is severely missing the point. Performing initial testing and deployment in areas with high fibre penetration would allow for this business model to be tested.Price isn't the big issue, 'rest of world' = US and this was on N4G.com, most of the comments were 'I like my playstation' etc etc, I don't hate the idea, it's inevitable that every single device we use in the future will be shrunk and networked together and cloud servers will help to power these devices but it's just too early, you can say 'they've been planning this for years' but business and ideas mess up no matter what planning has gone into it or not, when you put it in the real world you never know what will happen, there's just a lot of ways this could fall flat on it's face is all
US internet is just as crippled as the UK's as well
This is interesting: http://thenextweb.com/uk/2010/01/31/conservatives-promise-nationwide-100-meg-broadband-2017/
Obviously still a long way off
Online FPS games only work due to client side prediction and I don't see how that is possible with their planned system. I even remember playing Quake pre-prediction and it felt like ice skating 
There are two major stumbling blocks, bandwidth and latency, as with any network connection,
Say you can get a ping of 50ms, which is damn good really, that's 100ms (ping is a one-way thing) on top of what you'd get playing natively on a pc, that's easily enough to be noticeable.
Secondly bandwidth, they say 5Mbps for 720p with audio, now assuming 720p at 60fps the bitrate of the raw image will be ~1700Mbps, so that's some ridiculously good compression to be doing in 1ms. Even bluray allows 40Mbps for the video alone, admittedly thats 1080p so ~2.16x more pixels than 720, but even then that's several times more bitrate than OnLive are claiming are needed for 720p + audio + software overhead...
I can see the compression having fairly major artifacting/quality issues frankly.
And then there's the cost, if the £9.99 a month included any game then fine, but it appears that buying or renting the game is on top of that (and if it's 'bought' is it actually bought or do you need to keep paying for OnLive?). This makes it an expensive proposition really, 'enthusiast' gamers like us generally won't want it due to the quality/latency issues, whilst a lot of casual gamers won't want to pay out a tenner a month on top of playing games.