Photo-Realistic Virtual World Rendered LIVE Server-side

Here is an article on the technology behind it, it claims that the lags can be kept pretty low 12-100ms. Though it would need to be in the low end of this for it to not be irritating. It seems as if it will be used first for a Second Life type application. That is if it ever functions anytime soon, this will require huge render farms and/or p2p to render. Also it need a physics engine if you want to have cool games.