The cloud processing can still be used. Except it will only be useful for something off screen. It will have too much lag for anything on screen. And the data will be too slow unless there is some brilliant compression being used.
A game like skyrim will have a fully living world that the AI is always working even when you are exploring dungeons and such. It will never be used to enhance graphics.
Some people are over hyping it. And then others are flat out saying it wont work. It will be somewhere in the middle.
If they made it so I could use my PC over LAN as a form of cloud processing that would be cool. All of the benefits with no lag. Pity that will probably never happen. Too much money required to build a good pc along with buying the xbone.
