A couple of years ago a company was planning on releasing a console called Phantom. It looked promising (like the Onlive)
but they never released it. So my opinion about Onlive is wait 'till we actually see it released then tested.
If a device like the Onlive is to be successful in north america the ISP's better upgrade their technologyand speed. I have a 7mbps connection at home, which is the basic requirement for 720p resolution gaming with Onlive. I have a 24" monitor with a resolution of 1920*1200 so the Onlive service doesn't look so appealing to me at the moment as I would be downgrading in IQ.
I think it'll cut out a lot of midrange systems. High end systems will provide superior performance for awhile, if for no other reason than input lag (expounded by internet ping), but midrange systems will likely lose (or gain, depending how you look at it). Low-end systems might be able to game with just a call to your ISP (and upgrading your internet plan), which is bad for hardware guys, but good for consumers.