I played with this a little last night with my main rig (i5-2500K), my ASUS T100 tablet and Team Fortress 2. It was interesting. Even over my wireless network, it wasn't too bad. Not "perfect", but not offensive either.
I think the T100 just doesn't have the beef to process the video/audio streams fast enough: Input lag was minimal, fluctuating between 1 and 3ms most of the time-- I had no problem controlling my rig from the T100's keyboard/mouse, but the video didn't update fast enough to keep up with the action on the T100 screen. The lower the resolution was at the host, the better the client could cope with it.
That said, on more than one occasion I completely lost control of the game (random rocket shots, running into walls repeatedly) so it's still basically in beta.
That said, with a little more oomph on the client side, and some more fine-tuning, this is a pretty neat trick.