Source: http://kotaku.com/5582385/onlives-lag-tested-with-science
OnLive, a streaming service that hopes to replace both PCs and consoles as the gaming setup of the future, has its sceptics, who say it's too laggy to work. Why listen to them, when you can listen to science?
The boffins at DigitalFoundry have rigged up a PC and some testing units to see just how much lag OnLive really suffers from. At least in the case of this PC and this internet connection (its performance will of course vary on your location and bandwidth).
Don't mind the slow-motion footage. Take heed of the results, using Unreal Tournament III, which in this case show that the time between button press and on-screen action was around 150ms. That may sound like a lot, but it's typical of the kind of delays you'll face playing any kind of networked game, whether online or even locally.
Other games tested included Dirt 2 and Assassin's Creed II, with both of those games recording lag of around 150-216ms. While this is far from ideal, since it's still slower than you'd experience using a locally-based product (as in, a disc spinning in a console or a game installed on a hard drive), considering the nature and benefits of OnLive, they're...not bad.
It's worth noting, however, that the results were far slower than those originally promised by OnLive, who reckoned lag would only be between 35-80ms, proving perhaps that conditions in the real world are never as ideal as those in a testing environment.
OnLive Latency: The Reckoning [DigitalFoundry @ Eurogamer]