I think the legal issue of ownership will be one that eventually comes up f the whole system works like this. Also the possibility of a fire or the like wiping out hundreds of thousands of people's data at once- but then anyone playing an MMO already has that risk, and back-ups are pretty easy these days.
Basically... You play games... without your hardware doing any of the work. All of the software is stored and processed elsewhere and you get a video stream... One that you can control.
You can play any game in their library so long as you have a monitor and at least 2mb/s internet.
I was personally shocked at how well it worked. I live in a rural area with poor broadband coverage and I found that I could use it's service without any faults (I pretty much just get a lower quality of video.)