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Google Fiber would be more than enough.
It's both. At least the latency problem can be mitigated by playing games where this is less of an issue (no fast reactions required). But even with the best latency you won't have any fun playing something at 5 FPS on tiny resolution.
30-50 Mbp/s upload should be ok for 720p/1080p with at least 30 FPS.
As far as latency goes that is certainly something to consider. You won't be streaming via a Satellite internet connection on the host side thats for sure. However, I don't necessarily agree that it has to be within 10 miles like one of the posters said. I mean look at OnLive's service--they claim that you can be up-to 1,000 miles away from their server farms and still have a good experience with a low-latency broadband connection.