The service, which is currently in a closed beta test, will be "launching in North America soon, Gaikai's revolutionary cloud based streaming service will allow gamers to experience the latest video games via the Internet at any time, through multiple devices and platforms."
By placing the burden of rendering on a remote computer, equipped to play the latest games, the video from the game is then streamed to the user. Controls sent from the user are sent back to Gaikai, which passes inputs on to the game, and returns the video stream.
Concerns about bandwidth requirements have been raised about Gaikai and similar services like OnLive. While Gaikai had previously seemed to be focused on allowing gamers to play the latest games without sinking money into new hardware, the press release potentially positions the service as more of a trial or demo service:
Gaikai is a service that completely removes the need to pay to move gamers around on the internet (the most expensive part of customer acquisition), if the gamer is presented with a "BUY" button on any retailer or publisher website, then stop to consider if they want to buy or not, Gaikai can offer a trial of the game instantly within the web browser, with just one click. (Nothing to install, nothing to download.)
Personally, I think this is a great way to demo games on the PC, but I worry about not being able to accurately predict performance on my machine if I'm then required to buy the regular retail or digital version of the game.