1) They're both competing online "digital stores", so I doubt they'd want to cooperate closely like that. You might be able to strike a deal with them like that, but you'd have to contact them both, and they'd both want to take a cut of your revenue obviously. What's the point of selling on steam if you're relying on OnLive anyway?
1) Do you have to have your game only on onlive then or can you still have your game on steam and when they launch the game on steam its streamed thru onlive? Also i would assume onlive takes a nice fee?
2) Is it hard to create your own stream for your game?
3) and what cheats does streaming the game prevent exactly?
2) You need to rent enough dedicated servers to run enough instances of your game for your customers to be able to play it. That could be something like $100/mo per concurrent customer... You also need these servers to be distributed around the world so they're geographically close to your customers... and then build the actual video encoder/decoder and input streaming service, so that you can get the image/sound from your server-farms to the client in ~80ms (or whatever it is that OnLive claims to do). I have no idea how OnLive has managed to make this into a profitable business... Maybe they haven't -- maybe they're losing money and hoping to be bought out by Microsoft before they go bankrupt?
3) Assuming people can't hack into yours/OnLive's dedicated servers, then it stops all cheats that involve modifying the code/assets/network-packets. The only thing it doesn't stop is meta-gaming (e.g. sharing info outside of the game), input scripting (e.g. on a guitar hero game, I could record the winning inputs and just play them back), and some bots (most kinds of bots would become insanely difficult, as they'd need to be able to "see" the video stream, which requires the use of slow machine-intelligence/computer-vision algorithms).