[simias]

Oh I'm sure if they put their minds to it they can make some improvements and clever optimizations. The thing it becomes exponentially more difficult the lowest the latency you want to achieve, obviously. <300ms? easy. <100ms? manageable. <50ms? hey, very good! <10ms? uh, I want to see it with my own eyes.

Also, you have to remember that steam won't control the encoding end of the pipeline (and if the "steambox" is third party hardware with steamOS installed, no control at all on the hardware). Which means that in the end the observed latency will depend a lot on the hardware and drivers of the desktop PC and there isn't much Valve can do about that.

So in the end I'm sure it'll be more than fine to play Civilization or Torchlight, MMOs and most RPGs but maybe not Counter Strike or Quake III.

[asdasf]

Why are people acting like this is impossible even after it has been done? Remember onlive? Notice how the latency was entirely the same as your network latency to their servers, and there was no problem with encoding adding any (noticable) additional latency?