It's a game streaming service.
The publishers/developers can make a contract with onLive, and they'll put the games on their servers. You can then make an abo at onlive, and they will stream the game on your machine, so that you theoretically can play the newest games, even if your PC is years old, because everything is computed on their servers (prerequisite: highspeed internet, for sure; onLive is currently AFAIK only available in USA, Canada + GB, but will expand to continental europe in this year, IIRC).
But no, haven't heard anything.
I guess it would also violate Steams terms of use, or so.