I've used Onlive since the UK release. Mostly because I got a bunch of free stuff from when I went to Eurogamer. It's a pretty decent system, but you need a good internet connection to run games properly.
What happens when the connection slows is first the resolution reduces dynamically to make sure you're still streaming alright, then the framerate will slow down, then the game will freeze momentarily until some connection is restored. I've found games on Onlive are typically running somewhere around 480p with a framerate of 30fps. This will be much faster if you have a better connection, but British ISPs have been dragging their heels for some time.
My advice then: If there's some crazy deal running on Onlive, then it's worth it (I got Deus Ex HR for £1 as part of the launch promotion). If not, then you're better off on your console of choice or on your pc.
I plan to use Onlive as essentially a rental service going forward. It's pretty ok for that.