Remember we were talking about this yesterday (or the day before yesterday now), where the 'hoax' picture and assumed feature set of Playstation Cloud didn't fit the definition of the term 'Cloud'. The description of Playstation Cloud presented in the magazine article is a better idea of how the cloud system works, and will probably extend to make player made levels and other content stream instantly through remote servers. Think of the OnLive concept, it's the same thing. I imagine Sony could also implement a games on demand system similar to what OnLive is imagining, giving players the ability to rent titles from the PlayStation Store just like you can with Movies, except without downloading either of course. Sony's Online Entertainment branch is the largest server farm I know of, running servers for not only Sony's MMOs and PSN network, but also Final Fantasy XI and many other MMOs for lots of developers.
We'll see where it goes, but I can definately see a system similar to this being implemented.