Console virtualization? Wow. This is worth a watch for any Geeks/Gamers.
Steve Perlman -"The Process of Invention: OnLive Video Game Service" | SEAS TV
I think this was announced about a year ago. It's a great concept, but there's no way it'll work any time soon. Very few people have access to internet connections that could reliably send controller commands to the server and stream high quality HD video and audio (I believe they promised 720p at 60fps with surround sound) without a lot of latency. Of course you could lower the resolution and compress the signal more, but then it'd look shit. The sheer amount of processing power required for this service to work is enormous. Imagine that there are five million people looking to play the latest Call of Duty at the same time. You would need the power of five million high end gaming rigs running at the same time plus whatever is needed to encode the 720p 60fps surround sound output in real time, not to mention the stress on the servers.
So, unless this Steve Perlman is some kind of a space man from the future with infinite financial resources and no desire to ever make a profit, I wouldn't hold my breath.