Publishers aren't going to stop releasing standard PC SKUs of their games just because On Live becomes a success though, the logic just doesn't follow. OnLive's games run on Windows, DirectX, x86 CPUs and Nvidia/ATI GPUs just like the regular PC SKU. A successful OnLive would mean that developers get a standard PC version for their game created "for free." With plenty of established digital distribution networks meaning that publishing costs can scale almost linearly with sales, there's no good reason to give up on those extra sales. Its basically a guaranteed return for a completely inconsequential investment.
It works both ways of course, and its why OnLive is able to boast suh an impressive launch lineup. Since all thos games are already coming out on PC, all the hard work is already done, so publishers can sell them through OnLive without investing very much at all. Its precisely for this reason why the service has such impressive publisher support. The potential gains for them are huge (its basically the ultimate DRM, as it completely kills piracy, used and rental sales dead) and the investment required is incredibly small. Its just another revenue stream for the PC SKU of games, nothing more, nothing less.