AndrewWK said:
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It means you can play highly spec'ed games on any device that is good enough to handle the video stream(think TVs, tablets, smart phones, handhelds), because the game itself runs on high-end servers. In the future there probably won't be new consoles (not sure if after next gen there is another gen tbh), because you can just upgrade the servers and have better quality available for all those stream-enabled devices.
And Sony invested in this now, because the technology is advanced enough to go mass market (just test it on gaikai.com) so they needed to acquire the necessary software patents and the infrastructure and know-how gaikai build up.
Ofc it means "always online", which in the 1st world countries mostly is no problem anyways, and currently their demos on relatively low video quality settings use up 1mbit-2.5mbit/s. With a medium sized adsl connection you should easily be able to use it (if there are server clusters in your region and they aren't overloaded - gaikai itself was just a small start-up but now sony can build up more and better infrastructure for that system) at this quality setting. I expect Sony to push atleast 1080p for that in the future, which probably will need better connections.