What I hate is that example he gave of SSAO, being less for a couple seconds when you enter a room then loading in the good stuff from the cloud...
Whatever the solution is lets not do that. I think I'd rather wait out a 2 second load than that.
Depends how well devs can hide that transition. They have gotten good at that sorta thing after all with mip maps and now tessellation etc. Conceptually that transition aspect shouldn't be that tricky for them I wouldn't think.
Btw, Matt Booty from MS did explicitly mention MS's ambitions to make this the last console you ever need to buy. You may recall that bullet point from the Yukon leak which is what you seem to be referencing in your other post there. What is interesting is that for Yukon they had aimed to avoid any cloud stuff at all in 2013 and only talk up local streaming of content to devices around your house and saving real cloud stuff for the full scale bit in 2015. Seems they found this middle ground approach and are running with it in the interim to a fully viable OnLive alternative.