Just to clarify on the article, the PlayPack plan isn't required to use the service. It gives you access to several games (no new releases unless they change their minds), but you can still buy and play games on OnLive without it.
I haven't used the console yet (it's in the mail), but during the beta of the service I bought and played through Borderlands via OnLive. Overall it's a pretty good experience. I could play with the settings turned up higher on my home pc, but through the onlive service I could play on just about anything (when I played through Borderlands via OnLive it was on a 6 or 7 year old machine that wouldn't have had any hope of running the game natively). Saved games and that kind of thing are all stored on their servers as well so you can pick up and play from any machine. When I was using it, the minimum bandwidth requirement was 5 mbps, not sure if that's still the case or not.