Not only will these datacenters be handling the gameplay, they will also be encoding the video output of the machines in real time and piping it down over IP to you at 1.5MBps (for SD) and 5MBps (for HD). OnLive says you will be getting 60fps gameplay. First of all, bear in mind that YouTube's encoding farms take a long, long time to produce their current, offline 2MBps 30fps HD video. OnLive is going to be doing it all in real-time via a PC plug-in card, at 5MBps, and with surround sound too.

It sounds brilliant, but there's one rather annoying fact to consider: the nature of video compression is such that the longer the CPU has to encode the video, the better the job it will do. Conversely, it's a matter of fact that the lower the latency, the less efficient it can be.

More than that, OnLive overlord Steve Perlmen has said that the latency introduced by the encoder is 1ms. Think about that; he's saying that the OnLive encoder runs at 1000fps. It's one of the most astonishing claims I've ever heard. It's like Ford saying that the new Fiesta's cruising speed is in excess of the speed of sound. To give some idea of the kind of leap OnLive reckons it is delivering, I consulted one of the world's leading specialists in high-end video encoding, and his response to OnLive's claims included such gems as "Bulls***" and "Hahahahaha!" along with a more measured, "I have the feeling that somebody is not telling the entire story here." This is a man whose know-how has helped YouTube make the jump to HD, and whose software is used in video compression applications around the world.