A newly released iPad app uses crazy streaming technology, and high tech compression algorithms, to let you watch console games being played, in-real time, over the web.

It’s the official tablet app for OnLive, the streaming service for PC and Mac that lets you play high quality computer games without needing a beefy rig. A server plays the game for you and shoots the graphics down to your computer, while you send your keyboard commands back to the server. Except, it all happens in a handful of milliseconds.

On the PC it works rather well, letting you jump into Prince of Persia or Batman in seconds. As long as your internet connection is up to snuff, of course. Unfortunately, the tablet edition only lets you watch the action, and not play. “But, stay tuned,” the app description says, “as touch-aware and motion-aware OnLive games are [being] developed!”

So what can you do? You can stalk other players to watch them play games live, perhaps to pick up new strategies or just to laugh at them epically fail at Assassin’s Creed II. You can also check out brag clips (little snippets of gameplay showcasing awesome kills, photo finishes and sweet jumps) and trailers.

You’ll need a membership to use the app, but it’s free to sign up. You’ll also need some reliable internet, with either a 2 Mbps wi-fi connection, or a strong 3G signal. You’ll only get to use the viewer for 10 minutes at a time on 3G.

The service will soon go head to head with Gaikai, which uses similar streaming technology for game demos. It’s currently in beta on PC and Mac, but an iPhone and iPad app is promised.

The OnLive Viewer is free, and currently out in New Zealand. It will reach international App Stores from midnight tonight.

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