Gaikai is a pretty simple idea that could be described as OnLive without the tech mumbo jumbo. The idea is simple, you send your inputs to the Gaikai server and it sends a video. The process is so fast that it should be just like playing the game at home, without having to worry about installing, patching, or your set up. Sounds pretty sweet on paper at least.
Head over to David Perry's blog to see a video demonstration of how it works (the demo was made at E3).