For example, if the cloud detects that the client has high-end graphics, it can let the client do some rendering, transmitting abbreviated math that describes the function to be rendered, rather than forcing the server end to do the work centrally and ship lots of pixel values down the line.
The Sun Ray appliance effectively becomes the end node of the network, and its function is to display pixels on the screen, capture keyboard and mouse clicks, and send them back to the server.