Yesterday I was at an interesting talk at the computer science department: Virtualization will be the Operating System of the Cloud, Steffen Grarup, VMWare
Virtualization is a neat approach to cloud computing. You bundle up your application with the OS and whatever else it needs and pack it in a VMWare virtual machine, and then it can run on any machine on the cloud. Well, any Intel or AMD machine, I guess, I don't know what else, but of course there are some hardware limits. The cool thing is that the dependencies on the software on the computers "out there" - that you have very little control over - is virtually gone.
I expect there to be a lot of devils in the details - like what happens if your code depends on e.g. SSE instruction sets that are not available on all processors, or what happens if your code thinks it has two or four cores and optimises its thread usage for that, but the real hardware has fewer - but a neat idea it is.