Okay. TL;DR: New console, digital only, can run on TV, PC, and Mac, can play any game at uber-high quality and with no lag, and only requires that you have an internet connection. Has multiple functions including Friends list, ability to stream HD video, buy games through digital means, and many more...
Most notable is its ability to play any game at maximum detail, and does not require high-end computer hardware (early previews from IGN yesterday claim that they could play Crysis maxed out on a MacBook Air). You need some sort of little modem box and a monthly subscription, in addition to buying the games. It also works through TV if you use their mini-console.
The games themselves are run off hyper-advanced servers which have a completely new algorithm invented to compress the data so much that it barely causes any lag. (Note: These were the same people that invented the first Quicktime).
OnLive Homepage
Honestly, if they pull it off right, it can change gaming forever. I just finished watching the press conference live and it looks like they've pretty much got a good deal of it under the belt.
Oh, and no piracy.
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