New way to combat lag?

Latency is the reason why this will never work. Microsoft have been peddling "the cloud" nonsense as a marketing tool so I wouldn't believe the hype.

Not sure if you actually read the article, but it's essentially about using prediction techniques to pre-generate screens so that the player already has the screen without having to wait for the info sent to the "cloud" and back again; thereby reducing the latency you're describing.

Regardless, just thought I'd throw it out there. Do with it what you will.