I don't imagine the original game quality settings would be low, but the video compression quality is a huge deal. The bit-rate (or range) should be mentioned, as well as which codec is being used.
Going by their suggestion of at least a 30 Megabit connection for 1080p, the bitrate could potentially be comparable to that of an HDTV stream. However, since the compression needs to be performed in realtime with as little delay as possible, the image quality is likely to be much worse. Even with a fast connection, OnLive's compression was pretty blurry, and while it sounds like Nvidia has upped the bandwidth to some degree, I still wouldn't expect the image quality to look much better than a Youtube video. Anyone restricted by a bandwidth cap will also burn through it in no time. If they're transmitting video in the range of 20 Mbps, that would work out to around 9 GB of bandwidth used per hour.
Of course, image quality can be improved over time, as network connections and hardware improve, but something that can be harder to improve is latency. Unless they vastly increase their number of data centers, or you happen to live within a couple hundred miles of one of them (of which there are currently only 5 worldwide), you're going to experience significant input lag. I have a fast 66 Megabit connection with relatively low latency, but my pings to speed test servers in the rough vicinity of their closest data center (around 500 miles away) range from around 31ms at best, to around 50ms. At 60 frames per second, that transmission time alone would add a delay of at least 2 to 3 frames before my input gets reflected on screen. That's in addition to the time it takes them to render the scene and compress it before transmission, which could easily add a delay of another frame or two, and whatever time it takes the system to decode and display the output. Much like with Onlive, there's going to be very noticeable input lag for most people compared to playing the game locally on one's own computer.
Also, if OnLive has taught people anything about streaming services, it should be that nothing on them is permanent. Did you buy an OnLive console and hundreds of dollars worth of games on the service? After Sony bought them out for their patents, they provided a month's notice before shutting the service down, leaving customers with a paper weight, no games, and not even save data. What are the chances that Nvidia's service will also be unprofitable, and end up shutting down in a few years?
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