So PlayStation Now works. Like really. Like what the heck are you sure there isn't a PlayStation tucked away behind this TV and hidden somehow behind this Vita works. It's incredible because it doesn't feel incredible, if that makes any sense. You can play streaming games without any game console, and that's pretty damn impressive.
I played with PlayStation Now on a Sony Bravia TV (Puppeteer) and a PlayStation Vita (God of War: Ascension). My feeble gaming talents aside, everything was pretty damn smooth and looked fantastic. I would have never known the games were streaming and not from a console. The details won't be as beautiful on a PS3 but it's plenty good enough for people who don't pore over every single pixel.
However, details on PlayStation Now are pretty slim for, well, now. Sony will launch it on the PS4 and PS3 this summer and roll it out to the Vita and new 2014 Bravia TVs later. There will be subscription plans and rental options and the games will be PS3-era (though a game catalog isn't final yet). And it'll likely require a pretty healthy broadband plan for it to not be a stuttering mess.
So there's still a lot left to find out (like how it works on poor connections, the service's uptime, and so forth) but for now, it looks like this thing is actually going to work.