There are 3 main companies working on the Games On Demand concept (the ones that I know off so far at least). Mainly, OToy, OnLive, and GaiKai. Here is a brief description of each and a video showing the service in action.
OTOY is developing technology for delivering real-time 3D rendering through the browser. OTOY has partnered with AMD for creating these render farms. The service can be used for games among other applications.
Onlive develops server-based video game processing, allowing games to run without game consoles or high-end computers, moving away from a system in which games are purchased and downloaded. OnLive debuted in GDC 2009 with a splash and I talked about them before here. With OnLive, you have to download a browser plugin for your PC or MAC or you can use a Micro-console to play on your TV. Out of the three companies mentioned here, I believe OnLive has the most complete solution to the Cloud Gaming initiative.
GaiKai is a company backed by David Perry and based in Amsterdam also trying to deliver Games via a web browser without any plug-ins or custom Micro console. The game will run in a Flash player streamed to your web page.