I doubt cloud gaming will ever be used at large like sony is doing with stuff like PSnow. That model of it would be just too expensive to be on the cutting edge of gaming tech. Easier taking refurbished/reclaimed PS3s and turnig them into server racks to power PS3 games. What I feel will be done though is levergaing that power like how MS is proposing. Breaking the game up so that part of its processing would be in the cloud. So those PS3 servers can ultimately be used to handle physics, crowd physics, skyboxes...etc. Those are things that won't affect how smooth a game should feel.
Downside of that though, is the whole always online thing. And that is what I completely do not want, the day when being online no longer is a feature but an absolute necessity. I can get being online to play online multiplayer. But the idea of being online to just play ny game I have is very very unsettling.
