Sony calls Gaikai "the fastest most powerful network for gaming in the world." The plan is for Gaikai to allow you to explore any PS4 game. You'll be able to instantly experience anything you want, trying it for free, sharing it if you want to and purchasing things you fall in love with. Gaikai and Sony are also partnering with UStream.
Your friends will be able to interact with you while you're using the Gaikai service, posting comments to your screen while you're playing, or perhaps even providing in-game help.
The PlayStation Cloud service with Gaikai is also being used to allow you to play games from previous generations. Sony intends on rolling out the service in phases, but the plan is to allow backwards compatibility via streaming over time. The service is slated to work with PS4, PS3, Vita and some smartphones and tablets.
Sony first acquired Gaikai last July and rumors about its potential implications have been swirling ever since.