I've got Verizon Fios, and they're suppossed to be pretty fast. I used to have up to 15 Mb/s with them.
It looks like an interesting service. But I have my reservations about it myself and some doubts.
1. The only kind of play is online. So whenever you're internet service provider hic-ups or downright fails...there goes the game play.
2. Today's games are all about high-def (except the Wii) 720p-1080p video performance. That'll take quite a bit of bandwidth (a fast internet connection required).
3. You will no long own your games. You'll pay instead for a game "file" which is stored on their servers. So forget about trading or selling it in once you've completed the game. No taking over to a friend's house. And no borrowing.
4. Side effects on the industry. Game developers no longer have to make discs. It's going to put somebody out of a job. Stores like EB Games and Gamestop? No need for them, more people out of work.
5. No side perks of owning a console. I mean, I own a PS3. I use it for more than games. It's a computer, basically. It has a huge hard drive (well, I upgraded it) which I stores music, videos/movies, pictures, and games on. Yes, I do play games on it. It's also a blu-ray player. Sony has a video on demand like service you can "rent" movies from in both hi-def and standard. And I also use it to browse the web.
So...maybe it could replace the Wii. A console with games that while fun, are not considered to be "hardcore". The Xbox 360 and PS3 fit more of the high-tech processing power hungry gamers. And I have my doubts OnLive could compete with that.