Well well well, I got me one of those free Founders memberships. OnLive for FREE for the first year and cheap for the second year!
When I tried to play last night, it was pretty bad. My connection kept dropping and I had an awful time. But tonight the connection seems pretty sweet. (Perhaps my ISP is getting overloaded at night?) I'm located in Kansas City which is several hundred miles from the nearest data center but just within the 1000 mile range. I'm just using a "standard level" cable modem connection.
The graphics are on the low-rez side. Currently the max rez is a widescreen 1280x720 but it scales up just fine on my CRT monitor. The compression is GREAT! I really don't see it at all, at least at this resolution. Higher rez (1920x1080) should be showing up in about half a year but I can only see that making things better.
Lag is noticable but not too nasty. I was playing a sniper in the Borderlands demo so I needed pretty precise aim - and got it most of the time. I did notice the camera going wonky every now and again, probably because of a lost packet just as I started moving the mouse. You aren't going to win any FPS tournaments with OnLive but it's definitely playable (and even a slightly laggy mouse beats the hades out of a console gamepad).
Prices aren't bad. Fear 2 is $20 and Assassins Creed 2 is $40. When you buy them flat out, you are told you can play them for the next three years or so. (I presume they dump the games after that long to make room for new stuff.) Batman AA does things a bit differently, letting you buy a 3 day or 5 day pass. The 3 day pass costs $5 and the 5 day costs $7. Five day sounds like a better deal but, if you can only play on the weekends anyway, you might be better off going three days at a time. Borderlands has the most options, letting you pay $30 for a full pass, $9 for a five day pass, and $6 for a three day pass.
The game selection is not so impressive. Despite what the home page says, there's no Dragon Age: Origins or Mass Effect.
The Founding Member program gives you a free membership for the first year and only charges you $5/month for the second year. You can still sign up
here until July 15. USA only, I expect, but I didn't read closely enough to find out. At that price, OnLive is WELL worth it. Even if you don't buy games, being able to load up a game demo in 30 seconds and play for 30 minutes is very much worth the trouble of signing up, IMHO. (In fact, that's exactly what I did. Steam is having a sale on Borderlands today and I wanted to see if I would like the cell shade graphics.)
At full price… well… OnLive is not so worth it yet. It should be a very good system for playing games if you can't cough up the cash for a fancy new PC. I think it will give consoles a pretty good run, too. They need to get some more games in there before I would start giving them any money, though.