It's based around the idea that with really quick broadband, there is no need to run applications on your home computer anymore. They can be run remotely by the company that makes the application and the data streamed to your computer – sort of like how Hotmail and Gmail work but on a much bigger scale.
So no more having to upgrade your computer with faster and faster processors and better graphics cards. The computer that is hosting the app will take care of all of that – they will just stream all the visuals to you and do all the hard work on their end.
So here is the first company that is going to give it a go.
http://www.onlive.com/
There are lots of doubts surrounding this service – manly around the issue of lag. No one can quite believe that this service will run as smoothly as Onlive have promised. A veteran of online gaming myself, I know that it can really ruin your gaming experience. Also I have a download cap on my broadband, I have a feeling that a service like this would eat up my allowance at a very fast rate of knots.
Anyway I definitely think this kind of thing is the future - I will be the first one to sign up when it's out in the UK - I just think the technology behind our broadband just needs to catch up first.