So, I managed to give it a whirl. Seemed worth a punt for a quid.
Had my Chromebook hooked up to my 40" 1080p TV, with a XB1 controller connected. The Chromebook was on Wifi, but sat right next to the router. Like, 10cm away from it at most.
Well, on the up-side there are a lot of games to chose from, and the one I tried (SOR4) had no lag that I could perceive. In terms of responsiveness it seemed just as good as Stadia, which in turn is just as good as local hardware, so thats pretty awesome.
On the downside, the 720p display did look a little rough. Not horrible, not unplayable, just rough. There was some notable macroblocking in places, and the display seemed a bit more prone to stutter, with the screen never quite scrolling smoothly. There were occasional more serious drop-outs, but on Wifi thats to be expected.
I played some Monster Boy on Stadia, on the same device, just to compare (I typically run Stadia on my CCU) In comparison, the 1080p display looked, for the mot part, like the game was running locally. There was still occasional drop-outs, much fewer than xCloud, but they still happened. Screen-scrolling was also noticeably smoother for the most part.
So, for now, xCloud streaming is ok as a 'complimentary' service, but Microsoft still has a bit to go before their streaming tech is ready to take over from local hardware for big-screen gaming.