Thanks for the reply. What about the additional latency of sending the rendered framebuffer to the local graphics card after it's received from the cloud? It seems like you're right on the edge of being able to do one-frame latency between input and render at 30 fps (33 ms per frame), but would have at least two-frame latency at 60 fps?
Well if you run Aero in windows 7, that adds 3 frame of latency for example. In my testing, I don't think the decoode->canvas->present is much of an issue, but others might be more sensitive. Of course that last step is also browser specific. Firefox 19+ to me seems the smoothest, but Chrome 26+ an Opera 16+ give very good results too.