I hate cloud gaming, I thought Onlive was super neat when I tried it, but it's the lowest form of gaming in my opinion.
You have no control over your games which means no tweaking, modding, good graphics, terrible delays, no physical copies, etc. You're just a client accessing a remote computer with a controller...
I certainly hope cloud gaming goes away, but unlikely.
It will depend deeply on WHO their partners will be and what they intend people to be playing and doing. Sony's Home is (aside for it being Sony and generally boring) a very good starting point that Xbox 360 lacked. Saying AAA and cloud gaming in the same sentence though generates grave misgivings. So does the Nintendo Mii rip off Avatar characters. They have their place but they are off putting for people that don't play games like that.. if the cloud gaming service has any kind of uniformity to it, based on those types of characters, count me out. If they however are better than Sony's Home and so allow developers to reduce or stylize their offerings from there.. that would be much better.