Irrelevant and misleading. You can get it so that if some hardware fails then the rest of the system bypasses the failure and carries on. The biggest problem would be to ensure that humans notice the failure and fix it. Look up
fault tolerant systems.
I've run fault tolerant systems. They fail. They just fail in unexpected ways.
Also sometimes a computer at home fails due to hardware failure. In which case you have no computer for several days.
True.
But move the computer to a central location and you will be able to use the system more reliably.
Not necessarily true, and not the point. The point is, it sucks, and there are no practical solutions.
No. Not much different to what many offices use now.
Systems like Citrix and Terminal Server and X Window? Quite different actually. All of those still require you to have a computer on your desk, not just a monitor.
Furthermore, this sort of architecture suffers from significant diseconomies of scale. A dual-processor system costs about four times as much as a single-processor machine, and a quad-processor system costs about four times as much again. (Talking sockets here, not cores.) Beyond four processors, things start to get expensive.
We have home computers because that's what works. We aren't going to have widespread multi-gigabit internet access within ten years, and even where we do, the user experience would be worse than simply keeping your computer.
So we are waiting on a decent broadband system before this can become reality.
2.5Gbits is beyond simply "decent". And that's what's required just for a current low-end display. Displays ten years from now will probably requre 10-20Gbits.
Then one computer system could serve many people around the world so peak hour would not be much more than the quiet hour.
Not a chance. Have you ever actually used a remote desktop from the other side of the planet? I have. It's... Well, it's crap. And I was just using it for the simplest system admin tasks. For daily use, it would be a nightmare.
You
cannot eliminate latency.
No different than now. One virus can attack every Windows based computer.
Assuming that the same flaw is in XP and Vista and 7 (possible), and that none of the dozen or so major anti-virus offer any protection, and that you, the user, are careless, yes.
Remote virtualised systems offer a whole new vector of attack, though: Compromise the virtualisation platform, and every hosted system is wide open.